Which of the Following Statements Is Most Correct

question 3

Multiple Choice

Which of the following statements is most correct?

• A) Poor synchronization of cash flows which results in high cash management costs can be partially offset by increasing disbursement float and decreasing collections float.
• B) The size of a firm's net float is primarily a function of its natural cash flow synchronization and how it clears its checks.
• C) Lockbox systems are used mainly for security purposes as well as to decrease the firm's net float.
• D) If a firm can speed up its collections and slow down its disbursements, it will be able to reduce its net float.
• E) A firm practicing good cash management and making use of positive net float will bring its check book balance as close to zero as possible, but must never generate a negative book balance.

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Definitions:

Plasma

The liquid component of blood where cells like red blood cells, white blood cells, and platelets are suspended.

Blood

A vital fluid in humans and other animals that delivers necessary substances such as nutrients and oxygen to the cells and transports metabolic waste products away from those same cells.

Diapedesis

The squeezing of a cell through a blood vessel wall.

WBCs

White blood cells, which are part of the immune system and help the body fight infections and other diseases.