Which of the following statements is most correct?
A) A cash management system which minimizes collections float and maximizes disbursement float is better than one with higher collections float and lower disbursement float.
B) A cash management system which maximizes collections float and minimizes disbursement float is better than one with lower collections float and higher disbursement float.
C) The use of a lockbox is designed to minimize cash theft losses. If the cost of the lockbox is less than theft losses saved, then the lockbox should be installed.
D) Other things held constant, a firm will need an identical line of credit if it can arrange to pay its bills by the 5th of each month than if its bills come due uniformly during the month.
E) The statements above are all false.

Question

Quizplus · Accepted Answer

A cash management system that minimizes collections float (time taken to receive payments) and maximizes disbursement float (time taken to pay out) is more efficient, as it improves cash flow and liquidity.

Which of the Following Statements Is Most Correct