Synchronization of cash flows is an important cash management technique, as proper synchronization can reduce the required cash balance and increase a firm's profitability.

Question

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Synchronization of cash flows involves timing the inflows and outflows of cash to ensure that there is enough cash available to cover expenses and investments when they are due. This reduces the need for large cash balances and allows a firm to earn more from investing excess cash. Therefore, proper synchronization can increase profitability.

Synchronization of Cash Flows Is an Important Cash Management Technique