Which of the Following Actions in Managing the Cash Account

question 7

Multiple Choice

Which of the following actions in managing the cash account would, in general, either not be feasible or else not be consistent with the firm's wealth maximization objective?

• A)Increase synchronization of inflows and outflows.
• B)Use drafts for disbursing funds.
• C)Use a lockbox plan.
• D)Maintain an average balance which is equal to that required as a compensating balance or that which minimizes total cash management costs, whichever is lower.
• E)None of the above (all would be feasible and consistent actions).

---

Definitions:

Index

A statistical measure or indicator that tracks changes in various sectors, such as a stock market index, which measures the performance of a particular section of the stock market.

Complexity

The state or quality of being intricate or complicated, often relating to systems, organizations, or situations with multiple interconnected parts.

Divide Labour

Division of labor refers to the allocation of different tasks, roles, or responsibilities to different individuals or groups in order to improve efficiency and productivity in a workplace or economic system.

Mechanistic Structures

Organizational forms characterized by rigid hierarchies, high levels of formalization, and a narrow span of control.