The basic strategies that should be employed by a business firm in managing cash includes ________.
A) paying accounts payable as early as possible
B) turning over inventory as quickly as possible, avoiding stockouts
C) operating in a fashion that requires maximum cash
D) extending the credit period allowed to customers

Question

Quizplus · Accepted Answer

The basic strategy for managing cash should include turning over inventory as quickly as possible while avoiding stockouts. This helps generate cash for the business while ensuring that it can continue to operate without interruption. Paying accounts payable as early as possible or operating in a fashion that requires maximum cash may not be practical or feasible for all businesses. Extending the credit period allowed to customers may also have a negative impact on cash flow as it delays payment.

The Basic Strategies That Should Be Employed by a Business