{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

BMGT440ch27-abbreviated

BMGT440ch27-abbreviated - Cash Management Chapter 27...

Info icon This preview shows pages 1–7. Sign up to view the full content.

View Full Document Right Arrow Icon
BMGT440– Dr. E F Kiss ch27h- Cash Management Chapter 27
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
BMGT440– Dr. E F Kiss ch27h- Key Concepts and Skills Understand the reasons for holding cash balances, as well as potential methods for determining the target cash balance Understand the concept of float, as well as tools for managing disbursement and collections float Chapter Outline 27.1 Reasons for Holding Cash 27.2 Determining the Target Cash Balance 27.3 Managing the Collection & Disbursement of Cash 27.4 Investing Idle Cash
Image of page 2
BMGT440– Dr. E F Kiss ch27h- 27.1 Reasons for Holding Cash Transactions motive § Ability to cover normal activities of the firm Compensating balances § Hold required balances with financial institutions § Example, borrow $1,000,000 at 8.1% interest. What is total amount of interest payment? If bank requires 10% compensating balance? What amount of the $1,000,000 can you use? What is the effective interest rate that you are paying?
Image of page 3

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
BMGT440– Dr. E F Kiss ch27h- Other Factors Influencing the Target Cash Balance Borrowing § Borrowing is likely to be more expensive than selling marketable securities. § The need to borrow will depend on management’s desire to hold low cash balances.
Image of page 4
BMGT440– Dr. E F Kiss ch27h- 27.3 Managing the Collection and Disbursement of Cash Accelerating Collections Delaying Disbursements Disbursement Float Zero-Balance Accounts Drafts Ethical and Legal Questions Electronic Data Interchange
Image of page 5

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
BMGT440– Dr. E F Kiss
Image of page 6
Image of page 7
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern