Which of the Following Statements Represents Good Advice Prior to Making

question 92

Multiple Choice

Which of the following statements represents good advice prior to making capital expenditures?

• A)Capital expenditures represent borrowed funds that must be repaid in one year or less.It is important to seek the advice of your accountant prior to committing.
• B)Capital expenditures represent investment in inventories and expendable type assets that the firm will use in one year or less.It is important to maintain the appropriate level of monthly cash flow to pay for these expenditures.
• C)Most firms do not value capital expenditures on their balance sheets,so it is important to stay abreast of the market value of these assets at all times,in case you want to sell them.
• D)Capital expenditures are major investments - meaning they require large sums of funds.Companies should weight all possible options before committing available resources to projects that take significant amounts of funds and extended time.

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Definitions:

Price Of Food

The financial cost or value assigned to food items, influenced by factors such as production costs, supply, and demand.

Guineas

A British gold coin that was issued from 1663 until 1814, traditionally valued at 21 shillings.

Lemons

A term that can refer to a type of citrus fruit or, in economics, a product that is found to have defects after it has been bought.

Tangerines

A small citrus fruit with a deep orange color, known for its sweet flavor and easy-to-peel skin.