Which of the Following Is Not a Basic Principle of Cash

question 119

Multiple Choice

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

• A) Increase collection of receivables.
• B) Keep inventory levels high.
• C) Delay payment of liabilities.
• D) Invest idle cash.

---

Definitions:

Current Salvage Value

The estimated value that an asset can be sold for at the end of its useful life in its present condition.

Profitability Index

A measure comparing the present value of future cash flows to the initial investment, used to assess the attractiveness of a project.

Present Value

Present value is the current worth of a future sum of money or stream of cash flows given a specified rate of return, important in assessing the value of investments.

Initial Investment

refers to the initial amount of money invested in a project or venture to get it started.