Which of the Following Statements Is FALSE

question 25

Multiple Choice

Which of the following statements is FALSE?

• A)Under the Modigliani-Miller assumptions of perfect capital markets,the amounts of payables and receivables are irrelevant.
• B)One factor that contributes to the length of a firm's receivables and payables is the delay between the time a bill is paid and the cash is actually received.
• C)Collection float is the amount of time it takes before payments to suppliers actually result in a cash outflow for the firm.
• D)The credit that the firm is extending to its customer is known as trade credit.

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Definitions:

Canadian Dollar

The official currency of Canada, represented by the symbol CAD or the dollar sign $, sometimes with CA$ to distinguish from other dollar-denominated currencies.

Exchange Rate Risk

The potential for investors or businesses to experience losses due to changes in the currency exchange rates affecting the value of their investments or transactions.

Canadian Dollars

The official currency of Canada, represented by the symbol CAD or sometimes CA$.

Exchange Rate

Specifies the number of units of a given currency that can be purchased for one unit of another currency.