What is cash management?
A)Cash management includes the investment of excess cash in cash equivalents.
B)Cash management excludes the investment of excess cash in cash equivalents.
C)Cash management includes the investment of excess cash in equipment.
D)Cash management includes the investment of excess cash in joint ventures.

Question

Quizplus · Accepted Answer

Cash management involves managing the inflows and outflows of cash to optimize cash flow, minimize the risk of insolvency, and maximize profitability. This includes investing excess cash in cash equivalents such as money market funds, treasury bills, and commercial paper to earn interest income and maintain liquidity. Options B, C, and D are incorrect as they do not accurately describe cash management practices.

What Is Cash Management