Whether the given factors affect the firm’s target cash balance when all other factors remains constant.

Question

Explain how each of the following factors would probably affect a firm’starget cash balance if all other factors were held constant.a. The firm institutes a new billing procedure that better synchronizes itscash inflows and outflows.b. The firm develops a new sales forecasting technique that improves itsforecasts.

Answer 1

Question

Chapter 23, Problem 4Q

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To discuss: Whether the given factors affect the firm’s target cash balance when all other factors remains constant.

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Explain how each of the following factors would probably affect a firm’starget cash balance if all other factors were held constant.a. The firm institutes a new billing procedure that better synchronizes itscash inflows and outflows.b. The firm develops a new sales forecasting technique that improves itsforecasts.

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