It Has Been Argued That If One Could Perfectly Synchronize

question 86

Essay

It has been argued that if one could perfectly synchronize a firm's cash inflows and outflows,short-term financial planning would be unnecessary. Do you agree?
What actions can the firm's financial decision-makers take to reduce the degree of asynchronization?
Why should this be a concern?

---

Definitions:

Marginal Cost

The cost of producing one more unit of a good or service, reflecting the increase in total cost that comes from increasing the level of production by one unit.

Maximize Profits

A business objective aiming to achieve the highest possible financial gain from operations.

Economic Profit

The surplus remaining after total costs (both explicit and implicit) are deducted from total revenue, reflecting the true profitability of a firm.

ATC

Average Total Cost, which is the total cost divided by the quantity of output produced, reflecting the cost per unit of output.