Royal Enterprises suffers from poor cash management. Which type of cash balance should Royal Enterprises focus on in order to ensure its suppliers are paid in a timely manner?

A. Transactions balance

B. Speculative balance

C. Precautionary balance

D. Compensating balance

Royal Enterprises is considering changing its banking relationship. One of the banks under consideration charges very low service fees, but requires that the firm maintain a minimum balance in their account. What type of account is this?

A. Maintenance balance

B. Compensating balance

C. Speculative balance

D. Transactions balance

Twinco received a $10,000 check from one of its clients on the fifth day of the month, deposited it in its bank account, and recorded it on its accounting records. It will take two days for Twincos bank to process the check and send it to the customers bank, and another two days for the customers bank to process and release the funds. This would describe:

A. Aggressive working capital policy

B. Lockbox collection process

C. Remote disbursement

D. Collection float

Campus Books holds the bare amount of inventory possible. New supplies are delivered just as previous supplies run out. While this minimizes carrying costs, it increases the risk of stock outs. Which inventory method is Campus Books using?

A. Red-line method

B. EOQ model

C. Just-in-time

D. Safety Stock