Which of the Following Statements Is CORRECT

question 118

Multiple Choice

Which of the following statements is CORRECT?

• A) A conservative financing policy is one where the firm finances part of its fixed assets with short-term capital and all of its net working capital with short-term funds.
• B) If a company receives trade credit under terms of 2/10 net 30, this implies that the company has 10 days of free trade credit.
• C) One cannot tell if a firm uses a current asset financing policy that matches maturities, is conservative, or is aggressive without an examination of its cash budget.
• D) If a firm has a relatively aggressive current asset financing policy vis-á-vis other firms in its industry, then its current ratio will probably be relatively high.
• E) Accruals are an expensive but commonly used way to finance working capital.

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Definitions:

Introspection

The examination or observation of one's own mental and emotional processes.

Sexy Car Ads

Advertising that utilizes sexual imagery or themes to market and sell cars.

Attractive Model

An individual, especially in fashion or advertising, who is considered visually appealing or meets certain aesthetic criteria.

Generalized Other

A concept in sociology and social psychology referring to the general societal expectations that individuals use as a reference in shaping their behavior and understanding their role.