Which of the Following Statements Is Correct

question 4

Multiple Choice

Which of the following statements is correct?

• A) If a firm has a very high fixed asset turnover, it means that the firm may be nearing its maximum production capacity.
• B) An extremely low average collection period will maximize net income.
• C) In general, a firm should strive for a high average payment period because it wants to pay for its purchases as quickly as possible.
• D) All of these choices are correct.

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Definitions:

Antitrust Legislation

Laws designed to promote fair competition and prevent monopolies, conspiracies, and other situations that restrain trade.

Judicial Law

Laws created by judges through court decisions and interpretations rather than those enacted by legislative bodies.

Statutory Law

Laws that are written and enacted by legislative bodies, distinguishing them from common law or regulations enacted by executive agencies.

Constitutional Law

The body of law that defines the role, powers, and structure of different entities within a state, notably, the executive, the legislature, and the judiciary.