U.S. multinationals have had a busy year identifying, concentrating and ultimately wiring back the retained earnings that have been piling up in foreign subsidiaries. Thanks to the American Jobs Creation Act and its promised tax rate of 5.25% on repatriated funds, hundreds of billions of dollars have been flowing into corporate coffers. But many, if not most, companies are already nicely flush, sitting on respectable hoards of cash from cost cutting, divestitures and operating profits.

As obscene as it may sound, the question is: Is more cash always better? The answer is probably yes, but it is certainly not easier for treasurers looking for a good return.

While no one would ever imply that negotiating the intricacies of repatriation is a snap, the reality is that the biggest problem facing treasurers today is not when and how to get the money home, but what to do with it once it's there. Admittedly, short-term rates have improved recently, thanks to the Federal Reserve, but cash remains a major drag on bottom lines for companies that are earning well. Moreover, as businesses learned the hard way in the 1980s, accumulating too much cash can quickly convert a company into a prime takeover target. "Cash is a wonderful thing to have," notes David O'Brien, assistant treasurer of EDS Corp. in Plano, Texas, "but when it's yielding 3.5% pretax, then it's also a burden. That is not a viable return on a large asset. If a corporation can't do better than that, it should liquidate itself and give all the money back to shareholders."

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