The correct answer is D. 1, 2 and 4.
Cash flow management is the process of ensuring that a company has enough cash on hand to meet its obligations. It involves forecasting cash flows, managing accounts receivable and payable, and investing excess cash.
A lock-box system is a system in which customers send payments directly to a post office box that is managed by the company’s bank. This allows the company to receive payments more quickly and reduces the risk of lost or stolen checks.
Marketable securities are short-term investments that can be easily converted into cash. They are used to manage cash flow and to generate income.
Playing the float is a strategy that involves delaying payments to suppliers and accelerating collections from customers. This can help to improve a company’s cash flow.
A concentration bank account is a single account that is used to collect cash from multiple locations. This can help to reduce the amount of cash that a company needs to hold on hand.
Here is a more detailed explanation of each option:
Lock-box system: A lock-box system is a system in which customers send payments directly to a post office box that is managed by the company’s bank. This allows the company to receive payments more quickly and reduces the risk of lost or stolen checks.
Marketable securities: Marketable securities are short-term investments that can be easily converted into cash. They are used to manage cash flow and to generate income.
Playing the float: Playing the float is a strategy that involves delaying payments to suppliers and accelerating collections from customers. This can help to improve a company’s cash flow.
Concentration bank account: A concentration bank account is a single account that is used to collect cash from multiple locations. This can help to reduce the amount of cash that a company needs to hold on hand.