A financial manager reviews the firm's cash statement and realizes the company's current account at the bank does not go below a balance of $125,000.What should the financial manager do?
A) use any excess cash to pay creditors in advance
B) leave any excess cash in a chequing account for unforeseen needs
C) invest any excess cash
D) pay any excess cash to investors

Question

Quizplus · Accepted Answer

Investing any excess cash is a prudent financial strategy. It allows the company to earn a return on idle funds, rather than leaving them in a checking account where they typically earn little to no interest. This can enhance the company's profitability and financial position over time.

A Financial Manager Reviews the Firm's Cash Statement and Realizes