10. Which of the following will reduce collection time? I. billing customers by

Question

10. Which of the following will reduce collection time? I. billing customers by mail rather than electronically II. accepting debit cards but not checks as payment for a sale III. offering cash discounts for early payment IV. reducing the processing delay by one day

A. I and II only

B. I and III only

C. I, II, and III only

D. II, III, and IV only

E. I, II, III, and IV

11. Which one of the following statements is correct?

A. Funds received via automated clearinghouse transfers are available that day.

B. A depository transfer check is the most costly means of transferring funds into a cash concentration account.

C. The means selected to transfer funds into a concentration account depends primarily upon the size of the transfers.

D. Concentration accounts are used to transfer funds to lockbox locations as needed.

E. The most expedient means of transferring funds into a concentration account is a wire transfer.

12. Money market securities have which of the following characteristics? I. long maturities II. low default risk III. high degree of liquidity IV. low rates of return

A. I and III only

B. II and III only

C. I and IV only

D. II, III, and IV only

E. I, II, III, and IV

13. Which of the following statements is correct?
A. A firm has a greater likelihood of needing an unexpected loan when its cash flows are relatively constant over time.
B. The cost of borrowing affects the target cash balance of a firm.
C. Management's desire to maintain a low cash balance has no effect on the borrowing needs of a firm.
D. The target cash balance increases as the interest rate rises.
E. The target cash balance decreases as the order costs increase.

Explanation / Answer

10.

Following will reduce collection time:

II. accepting debit cards but not checks as payment for a sale

III. offering cash discounts for early payment

IV. reducing the processing delay by one day

Hence answer shall be:

D. II, III, and IV only

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