Which of the Following Statements Is Correct

question 36

Multiple Choice

Which of the following statements is correct?

• A) A lockbox system is an example of concentration banking.
• B) For a firm that has many divisions or plants operating over a wide geographic area, payables centralisation offers little benefit.
• C) If a firm increases its disbursement float, its net float will also increase, other things held constant.
• D) There are no actions a firm can take to improve its synchronisation of cash flows.
• E) A lockbox system does not affect collections float.

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Definitions:

Cash Flows

The overall volume of cash transactions into and from a corporation, significantly affecting its liquidity status.

Financial Statement Analysis

The process of evaluating and reviewing a company's financial statements to make better economic decisions.

Earnings

The amount of profit that a company generates during a specific period.

Inventory Turnover

A financial ratio that measures how quickly a company sells and replaces its stock of goods within a given period.