Which of the Following Is not a Basic Principle of Cash

question 107

Multiple Choice

Which of the following is not a basic principle of cash management?

• A)Increase the speed of collection on receivables.
• B)Maintain idle cash.
• C)Keep inventory levels low.
• D)Delay payment of liabilities.

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Definitions:

Working Capital

The difference between a company's current assets and its current liabilities, indicating the liquid assets available for day-to-day operations.

Straight-Line Depreciation

A way of allocating an asset's expenditure smoothly over its effective life.

After-Tax Discount Rate

The interest rate used in discounting cash flows that takes into account the tax implications of the investment.

Incremental Sales

The additional revenue generated from a specific business decision or action.