Session 11: Corporate Finance
Reading 48: Working Capital Management
LOS d: Identify and evaluate the necessary tools to use in managing a company's net daily cash position.
An appropriate cash management strategy for a company that has a seasonally high need for cash prior to the holiday shopping season would least likely include:
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A) |
investing in U.S. Treasury notes at other times of the year because they are highly liquid. | |
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B) |
allowing short-term securities to mature without reinvestment. | |
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C) |
borrowing funds though a bank line of credit. | |
Treasury notes have maturities between 2 and 10 years and, thus, have maturities longer than those of securities suitable for cash management. Allowing short-term securities to mature without reinvesting the cash generated would be one way to meet seasonal cash needs. Short-term bank borrowing or issuing commercial paper that can be paid off when holiday sales generate cash would be appropriate strategies for dealing with a predictable short-term need for cash. | 
发表于 2011-3-24 14:50
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