All of the following elements of a cash management program will likely contribute to an increase in the value of the firm EXCEPT
A) collect cash more quickly.
B) slow down cash disbursements.
C) prepare more accurate cash flow forecasts.
D) increase cash balances for precautionary reasons.

Question

Quizplus · Accepted Answer

Increasing cash balances for precautionary reasons might not necessarily contribute to an increase in the value of the firm. Holding excess cash can be inefficient as it could be invested in projects that yield a higher return, thus increasing the firm's value. Collecting cash quickly, slowing down disbursements, and accurate cash flow forecasts contribute to better cash management and can enhance the firm's value by optimizing the use of available funds.

All of the Following Elements of a Cash Management Program