Efficient Funds Management Attempts to Reduce Mailing and Clearing Time

question 89

Multiple Choice

Efficient funds management attempts to reduce mailing and clearing time. Two methods do this by:

• A) moving collections and deposits closer together in concentration banks; and moving
• surplus funds quickly by wire transfers.
• B) moving mailing points to cross country locations and using depository drafts to transfer
• funds.
• C) drawing cheques against zero balance accounts and using cross country mailing.
• D) wiring funds to zero balance accounts and using lockboxes in many cities.
• E) None of the above.

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Definitions:

Contribution Margin

The amount by which a product's selling price exceeds its total variable costs, indicating how much contributes to covering fixed costs and generating profit.

Dollar Amount

A specific value of money in terms of the currency of the United States, expressed in dollars.

Investment Center

A division or unit within a company that is responsible for its own revenues, expenses, and assets, and its performance is evaluated on its return on investment.

Generates Revenue

Activities or processes that result in the earning of income for a business through the sale of goods or services.