Which Statement Best Describes Float

question 90

Multiple Choice

Which statement best describes float?

• A)A lack of synchronization of cash inflows and outflows will result in larger cash balances than would be necessary with better synchronization, but the cash balances can be reduced by increasing disbursement float and decreasing collections float.
• B)The size of a firm's net float is primarily a function of its natural cash flow synchronization and how it clears its cheques.
• C)Lockbox systems are used both for security purposes and to decrease the firm's net float.
• D)If a firm speeds up its collections and slows down its disbursements, this will reduce its net float.

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Definitions:

Supply Chain

The entire process of making and selling commercial goods, including raw materials sourcing, manufacturing, distribution, and sales.

Small Players

Companies or entities that have a minor share in a market or industry, typically characterized by smaller teams, budgets, or influence.

Response Time

The duration between when a request is made and when the response is received.

Facilities

Physical locations like factories, warehouses, and distribution centers involved in the production, storage, and distribution of goods in a supply chain.