Which of the following statements is correct?
A)Poor synchronization of cash flows which results in high cash management costs can be partially offset by increasing disbursement float and decreasing collections float.
B)The size of a firm's net float is primarily a function of its natural cash flow synchronization and how it clears its checks.
C)Lockbox systems are used mainly for security purposes as well as to decrease the firm's net float.
D)If a firm can speed up its collections and slow down its disbursements, it will be able to reduce its net float.
E)A firm practicing good cash management and making use of positive net float will bring its check book balance as close to zero as possible, but must never generate a negative book balance.

Question

Quizplus · Accepted Answer

The Answer of Which of the following statements is correct?
A)Poor synchronization of cash flows which results in high cash management costs can be partially offset by increasing disbursement float and decreasing collections float.
B)The size of a firm's net float is primarily a function of its natural cash flow synchronization and how it clears its checks.
C)Lockbox systems are used mainly for security purposes as well as to decrease the firm's net float.
D)If a firm can speed up its collections and slow down its disbursements, it will be able to reduce its net float.
E)A firm practicing good cash management and making use of positive net float will bring its check book balance as close to zero as possible, but must never generate a negative book balance.

Which of the Following Statements Is Correct