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NEW QUESTION: 1
A working capital technique that increases the payable float and, therefore, delays the outflow of cash is:
A. The use of a local post office box.
B. Concentration banking.
C. A lock-box system.
D. A draft.
Choice "b" is correct. A draft is a working capital technique that increases the payable float and, therefore,
delays the outflow of cash.
Each of the three following choices accelerate the flow of cash and/or data:
Choice "a" is incorrect. Concentration banking automatically channels funds from every source of the
business into a single usable account, thus quickly identifying available funds each day, and moving them
to accounts that have funding requirements that day, and investing the remainder in short-term,
interestbearing instruments until needed.
Choice "c" is incorrect. A lock-box system is simply a central collection location that receives payment
checks (generally, the bank where a central checking account is maintained by the firm).
Choice "d" is incorrect. The use of a local post office box allows more rapid access to mail than actual
delivery to a street address.