Cash Flow to Creditors Increases When

question 49

Multiple Choice

Cash flow to creditors increases when:

• A)interest rates on debt decline.
• B)accounts payables decrease.
• C)long-term debt is repaid.
• D)current liabilities are repaid.
• E)new long-term loans are acquired.

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Definitions:

Elastic Demand

A situation in which the quantity demanded of a good or service significantly changes in response to a change in price.

Close Substitutes

Products or services that can easily replace one another in usage or consumption.

Demand Curves

Graphs showing the relationship between the price of a good and the quantity demanded by consumers, typically downward sloping.

Price Elasticity of Demand

A measure of how much the quantity demanded of a good responds to a change in the price of that good, expressed as a percentage change.