When Using the Bardahl Formula, an Increase in Annual Credit

question 44

Multiple Choice

When using the Bardahl formula, an increase in annual credit sales (while holding the average accounts receivable balance constant) has which of the following effects on the working capital requirements?

• A)increase
• B)decrease
• C)no effect
• D)increase, decrease, or no effect, depending on other factors

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Definitions:

Entity

Any individual, company, organization, or structured group with a distinct legal existence.

Shares

Financial instruments that represent ownership in a company or corporation, entitling the holder to a portion of its assets and profits.

Legal Support

Assistance provided in legal matters, whether through direct legal representation or through advice and information regarding laws and legal processes.

Clinics

Healthcare facilities that provide outpatient medical services, treatments, or consultations.