1. What factors should the firm consider in deciding whether to establish a lockbox collection system?

2. What are the primary reasons a firm holds a liquid asset balance?

3. Describe the cost trade-offs associated with maintaining the following:

a. Excessive liquid asset balances

b. Inadequate liquid asset balances

4. Define float and describe the difference between disbursement float and deposit float.

5. Describe the primary services a bank provides to a firm. How is the bank com- pensated for these services?

6. Describe the methods available to a firm for expediting the collection of cash.

7. Describe the techniques available to a firm for slowing disbursements.