Questions: Which of the following is not considered an effective cash management strategy? Multiple Choice Encouraging collection of receivables by offering discounts for early payments. Delaying payment of liabilities until the last possible day. Retaining excess cash for unexpected expenditures. Planning expenditures. Keeping only necessary assets.

The answer is the third one: Retaining excess cash for unexpected expenditures.

Explanation for each option:

1. Encouraging collection of receivables by offering discounts for early payments.
   This is an effective cash management strategy because it accelerates cash inflows, improving liquidity.

2. Delaying payment of liabilities until the last possible day.
   This is also an effective strategy as it allows the company to use its cash for other purposes until the payment is due, optimizing cash flow.

3. Retaining excess cash for unexpected expenditures.
   This is not considered an effective cash management strategy because holding too much cash can lead to opportunity costs. Instead, companies should have a balance between liquidity and investment in productive assets.

4. Planning expenditures.
   This is an effective strategy as it helps in forecasting cash needs and ensuring that funds are available when required.

5. Keeping only necessary assets.
   This is an effective strategy because it ensures that the company is not tying up cash in unproductive assets, thus optimizing the use of resources.

In summary, retaining excess cash for unexpected expenditures is not considered an effective cash management strategy because it can lead to inefficiencies and missed opportunities for investment.