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CFA Level 1
Corporate Finance

Effective Cash Management Practice

Very Easy Working Capital Management Cash Management

In managing a company's finances, working capital is crucial for day-to-day operations. One significant aspect of working capital management is cash management, where a firm seeks to optimize its cash inflows and outflows.

Consider the following scenario: A business has received a payment from a customer and must decide how to manage this excess cash. Which of the following options is generally considered a good practice in cash management?

Hint

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