A Company Trying to Optimize the Use of Float Will

question 89

Multiple Choice

A company trying to optimize the use of float will try to

• A) increase its disbursing float.
• B) decrease its disbursing float.
• C) decrease processing float.
• D) Both A and C

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Definitions:

Cash Flows

The total amount of money being transferred into and out of a business, representing the operational, investing, and financing activities.

Cost of Capital

The total cost of acquiring funds used for investment purposes, including debt and equity.

Terminal Value

Terminal Value is the estimated value of a business or investment at the end of a forecast period, calculated to determine its future cash flows in perpetuity.

Cash Flow

The net amount of cash and cash-equivalents being transferred into and out of a business.