Use of excess cash one option a firm usually has with any excess cash
QUESTION
Use of excess cash one option a firm usually has with any excess cash is to pay its suppliers more quickly. What are the advantages and disadvantages of this use of excess cash?
pportunity of investing the excess cash in short term investments and earning income on it. The cash cycle of the firm increases since the accounts payable period decreases. Moreover the suppliers may become habitual of getting early payments that may create problems for the firm in the future.
ANSWER:
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