The basic strategies that should be employed by the business firm in managing cash include all of the following EXCEPT
A) paying accounts payable as late as possible without damaging the firm's credit rating.
B) turning over inventory as quickly as possible, avoiding stockouts.
C) operating in a fashion that requires maximum cash.
D) collecting accounts receivable as quickly as possible without damaging customer rapport.

Question

Quizplus · Accepted Answer

The basic strategies for managing cash involve maximizing inflows and minimizing outflows. Option C goes against this principle by encouraging the firm to operate in a way that requires maximum cash, which is counterproductive to cash management. Options A, B, and D all align with cash management principles, emphasizing the importance of timely payment of accounts payable, efficient inventory management, and prompt collection of accounts receivable.

The Basic Strategies That Should Be Employed by the Business