EVALUATING CASH FLOW SYSTEMS UNDER GROWTH

This paper considers a potential extension and refinement of the type of cash flow analysis of cash management systems commonly found in financial management texts. The timing effect of a cash management system has three distinct components—overlap, acceleration, and residual. However, only the overlap component is explicitly quantified by the standard evaluation procedure. Conditions are specified under which quantification of an additional component (acceleration) can significantly improve the accuracy of the estimates.