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Net disbursement float is more desirable because the bank thinks the firm has more money than it

actually does, and the firm is therefore receiving interest on funds it has already spent.

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10y ago
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1mo ago

A firm typically prefers net collection float because it allows them to receive funds quicker by consolidating multiple incoming payments into one lump sum. This helps with cash flow management and reduces the risk of having various small amounts tied up in transit. Disbursement float, on the other hand, can delay payments and impact liquidity.

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Q: A firm prefer net collection or disbursement float?
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