Which One of the Following Statements Is Correct

question 245

Multiple Choice

Which one of the following statements is correct?

• A) Short-term assets that trade in the money market account mature in two years or less.
• B) Banks forbid the transfer of excess funds from a chequing account into an investment account on a daily basis.
• C) Firms sometimes create a temporary cash surplus because they are saving funds for a major expenditure.
• D) Cyclical firms increase their long-term financing such that they continually have a cash surplus.
• E) Corporations are not permitted to use money market mutual funds but can use bank money market accounts.

Recognize the advantages and disadvantages of ADR over traditional litigation.

Identify the circumstances under which arbitration is preferred and its enforceability within legal and contractual contexts.

Distinguish between different types of ADR (arbitration, mediation, negotiation) and their respective processes and outcomes.

Understand the role of the Equal Employment Opportunity Commission (EEOC) and its interaction with arbitration agreements in the context of employment discrimination.

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Definitions:

Initial Outlay

The upfront expenditure necessary to initiate a project or investment.

Incremental Cash Flows

The additional cash flow generated by a company as a result of a decision to undertake a new project or investment.

Capital Budgeting

The process by which a business evaluates and selects long-term investments that are worth more than the cash they cost.

Sunk Costs

Costs that have been incurred and cannot be recovered, not affecting future business decisions.