Martin's Methods, an educational training firm, has taken steps to reduce the time taken to process the cheques received from its customers from four days to two. Additionally, the firm has switched banks, as its prior bank made funds available for withdrawal one day after deposit, while the new bank makes deposits available immediately. All else the same, these steps should __________ the firm's __________ float.

Question

Quizplus · Accepted Answer

Decreasing the time to process cheques and switching to a bank that makes funds available immediately reduces the time between when a customer sends a payment and when the funds are available for use by the firm, thus decreasing the firm's net float.

Martin's Methods, an Educational Training Firm, Has Taken Steps to Reduce