Financial benefits of a computerized MIS: Which of the following improvements can a well-designed MIS enable through better cash and information management?

Introduction / Context:
A computerized Management Information System (MIS) enhances visibility into receivables, payables, inventories, and cash positions. With timely and accurate information, treasurers and controllers can optimize working capital and financing decisions, improving financial outcomes beyond simple reporting speed.

Given Data / Assumptions:

• Accurate, current cash forecasts reduce idle balances.
• Improved collections and payable timing lower borrowing needs.
• Better credit positioning can qualify a firm for lower interest rates.

Concept / Approach:
Information quality drives financial choices. For example, precise daily cash positions allow investing surpluses in short-term instruments (raising returns) and timing payments to minimize borrowing (reducing loan frequency/size). Strong information controls and predictable cash flows can improve perceived creditworthiness, contributing to lower borrowing costs.

Step-by-Step Solution:
Link MIS outputs (aging reports, cash forecasts) to action (invest surplus, time disbursements).Quantify effect: less idle cash → more invested at short-term yields.Reduced reliance on ad hoc short-term loans → potential for better rates and fees.

Verification / Alternative check:
Working capital optimization frameworks emphasize information timeliness and accuracy as prerequisites for treasury gains, confirming all listed benefits are plausible outcomes.

Why Other Options Are Wrong:
Each single item can be true; selecting only one ignores the cumulative effect of an MIS on treasury performance.

Common Pitfalls:
Assuming MIS automatically creates savings without process changes; benefits arise when managers act on improved information.

Final Answer:
All of the above