Which of the following is true about a firm’s float?

A firm strives to minimize the float for both cash receipts
and cash disbursements.
A firm strives to maximize the float for both cash receipts
and cash disbursements.
A firm strives to maximize the float for cash receipts
and minimize the float for cash disbursements.
A firm strives to maximize the float for cash disbursements
and minimize the float for cash receipts.Show Result

Correct - Your answer is correct.

Wrong - Your answer is wrong.

Detailed Answer

(d) The requirement is to describe how firms attempt to
manage float. Float is the time that elapses relating to mailing,
processing, and clearing checks. A firm strives to minimize its
cash receipts float to get use of the receipts as soon as possible,
and to maximize its cash disbursement float to get use of the
funds for as long as possible. Therefore, the correct answer is
(d).