FIN3702 Assignment 1 Semester 1 2023 (Questions and Answer) {Distinction}

Cash Forecasting - -the treasury staffs need to compile this information from all subsidiaries into short-range and long-range cash forecasts. These forecasts are needed for investment purposes, so the treasury staffs can plan to use investment vehicles that are of the correct duration to match secluded cash flows. -Working Capital Management - -involves changes in the level of current assets and current liabilities in response to a company's general level of sales and various internal policies. -Cash Management - -the treasury staff uses the information it obtained from its cash forecasting and working capital management activities to ensure that sufficient cash is available for operational needs. -Investment Management - -the treasury staff is responsible for the proper investment of excess funds. The maximum return on investment of these funds is rarely the primary goal. Instead, it is much more important not to put funds at risk, and also to match the maturity dates of investment with a company's projected cash needs. -Treasury Risk Management - -the interest rates that a company pays on its debt obligations may vary directly with market rates, which present a problem if market rates are rising. The treasury staffs can create risk management strategies and implement hedging tactics to mitigate company's risk. -Management Advice - -the treasury staff monitors market conditions constantly, and therefore are an excellent in-house resource for the management team should they want to know about interest rates that the company is likely to pay on dew debt offerings, the availability of debt, and probate the terms that equity investors will want in exchange for their investment in the company.