Which of the Following Presents an Effective Technique to Improve

question 98

Multiple Choice

Which of the following presents an effective technique to improve cash management?

• A) Speed up cash payments and slow down cash collections.
• B) Speed up cash collections and slow down cash payments.
• C) Speed up both collections and payments of cash.
• D) Slow down both the payment and collections of cash.

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Definitions:

Variable Costs

Costs that fluctuate in direct proportion to changes in levels of production or sales volumes.

Fixed Costs

Financial obligations like rent, wages, and insurance that are stable and do not vary with the level of goods manufactured or sold.

Break-even

The point at which total revenues equal total costs, resulting in neither profit nor loss for the business.

Margin of Safety

The difference between actual or projected sales and the break-even point. It indicates the amount of sales decline a business can endure before it starts incurring losses.