Answer to Question #50097 in Finance for abdulla sabit
An effective and efficient cash management is considered to be important for the following reasons:
1. Cash management ensures that the firm has sufficient cash during peak times for purchase and for other purposes.
2. Cash management helps to meet obligatory cash out flows when they fall due.
3. Cash management assists in planning capital expenditure projects.
4. Cash management helps to arrange for outside financing at favorable terms and conditions, if necessary.
5. Cash management helps to allow the firm to take advantage of discount, special purchases and business opportunities.
6. Cash management helps to invest surplus cash for short or long-term periods to keep the idle funds fully employed.
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