Cash Management Primarily Involves

question 45

Multiple Choice

Cash management primarily involves:

• A)optimizing a firm's collections and disbursements of cash.
• B)maximizing the income a firm earns on its cash reserves.
• C)reconciling a firm's book balance with its bank balance.
• D)determining the optimal level of liquidity a firm should maintain.
• E)determining the best method of raising capital.

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Definitions:

Depreciation Expense

The allocation of the cost of a tangible asset over its estimated useful life to account for wear and tear, obsolescence, or decay.

Coupon Rate

The interest rate that a bond issuer will pay to a bondholder.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold in a company, including material and labor costs.

Consolidated Income Statement

A comprehensive income statement that combines the financial performance of a parent company and its subsidiaries into a single document.