7. Which of the following are benefits derived from short-term financial plannin

Question

7. Which of the following are benefits derived from short-term financial planning? I. having advance notice of when your firm will require external financing II. being able to determine the extent of time for which a loan is required III. having the ability to time capital expenditures in order to place the least financial burden possible on a firm IV. knowing for certain what your cash balance will be six months in advance

A. I and III only

B. I, II, and III only

C. II, III, and IV only

D. I, II, and IV only

E. I, II, III, and IV

8. A lockbox is a:

A. special safe used by a firm for overnight storage of any cash or undeposited checks.

B. special safe used by a firm that can only be opened at prespecified times of the day.

C. box located in a bank's vault that is rented by a firm and used to hold unprocessed checks.

D. special post office box which can only be opened by prespecified postal inspectors for direct delivery to the addressee.

E. post office box strategically located so that a firm's receivables can be collected faster.

9. Forensicon Inc. has branch operations in 3 states. Each branch deals with a local bank. However, all excess funds in these branch bank accounts are transferred on a daily basis to the firm's primary bank located near the firm's home office. This routine of transferring cash to the primary bank on a regular basis is referred to as:

A. cash concentration.

B. strategic cash disbursement.

C. transfer flotation.

D. payables management.

E. float management.

Explanation / Answer

7./ BENEFITS OF SHORT TERM FINANCIAL PLANNING ARE

?ANSWER OPTION I , II AND III ONLY OPTION B

8./

A LOCK BOX IS A BOX LOCATED IN A BANK'S VAULT THAT IS RENTED BY A FIRM AND USED TO HOLD UNPROCESSED CHECKS.

ANSWER OPTION C

9./

THIS ROUTINE OF TRANSFERRING CASH TO THE PRIMARY BANK ON A REGULAR BASIS IS REFERRED TO AS: CASH CONCENTRATION.

CASH CONCENTRATION IS DIVERSION OF CASH BALANCE FROM SECPNDARY ACCOUNT TO PRIMARY ACCOUNT FOR EFFICENT CASH MANAGEMENT.

ANSWER OPTION A

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