Compensating balances a are used to finance inventories b, Financial Management

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Compensating balances a are used to finance inventories b

Compensating balances: A. Are used to finance inventories B. Earn high rates of interest for the firm C. Are ordered monthly (or quarterly) following forecasts based on cash budget analysis to compensate for shortfalls D. Increase the effective interest earned by banks on credit lines E. Require a commitment fee

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Financial Management: Compensating balances a are used to finance inventories b

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Financial Management: Compensating balances a are used to finance inventories b

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