Prudent cash management is an important function in any business. Large amounts of cash sitting idle in non-interest-bearing checking accounts can cost a company thousands—even millions—of dollars annually in foregone revenue. Thus, many businesses invest large amounts of idle cash in Treasury bills, certificates of deposit (CDs), and money market accounts.

Visit the Bankrate.com home page at the following address:

www.bankrate.com

Search the site for information on CDs, money market accounts, and other interest-bearing products. Look for links under the “Compare Rates” menu.

Instructions

a. Prepare a table showing the current interest rates on Treasury bills, various CDs, and money market accounts.

b. If you were in charge of investing $1 million among the cash equivalents identified in part a, how would you make your allocation? Defend your answer.