Identify Which of the Following Statements Is True

question 19

Multiple Choice

Identify which of the following statements is true.

• A)The Bardahl formula is based on the firm's inventory period, receivables period, credit period, and total cash expenditures for cost of sales and operating expenses.
• B)The Bardahl formula uses the concept of working capital, cash over current liabilities.
• C)The Bardahl formula provides mathematical exactness when calculating reasonable working capital needs for accumulated earnings tax purposes.
• D)All of the above are false.

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Definitions:

S&P 500

An index that measures the stock performance of 500 large companies listed on stock exchanges in the United States.

DJIA

The Dow Jones Industrial Average, a stock market index that measures the stock performance of 30 large companies listed on stock exchanges in the United States.

Risk-free Rate

The return on an investment with zero risk, indicating the interest an investor would expect from an absolutely risk-free investment over a specified period.

Dividend Yield

The dividend per share divided by the price per share, indicating how much cash flow you are getting for each dollar invested in an equity position.