Question 1: What are the two principal reasons for holding cash? Can a firm estimate its target cash balance by summing the cash held to satisfy each of the two?
Question 2: Why would a lock box plan make more sense for a firm that makes sales over the United States than for a firm with the same volume of business but concentrated in its home city?
Question 3: What are the four elements of a firm's credit policy? To what extent can firms set their own credit policies as opposed to having to accept policies that are dictated by "the competition"?
Question 4: What is the days sales outstanding (DSO) for a firm whose sales are $2,920,000 per year and whose accounts receivable are $312,000? 2- Is it true that if this firm sells 3/10, net 40, its customers probably all pay on time? 3- Is it true that if a firm calculates its days sales outstanding, it has no need for an aging schedule?