USE THE FOLLOWING INFORMATION TO ANSWER THE FOLLOWING QUESTION

question 4

Multiple Choice

USE THE FOLLOWING INFORMATION TO ANSWER THE FOLLOWING QUESTION.
Assume that the production chain for an economy is characterized by the following transactions:

-If the car dealer is subject to a 10 percent retail sales tax RST) , how much would it pay in taxes?

• A) $ 500
• B) $1,100
• C) $0
• D) $600

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Definitions:

Cash Management

Cash management involves the collection, handling, and usage of cash. It aims to manage a company's short-term financial stability and liquidity.

Adequate Liquidity

The ability of an entity to meet its short-term financial obligations with its readily available assets.

Accounts Receivable Factor

A financial transaction where a company sells its accounts receivable to a third party (factor) at a discount, to obtain immediate cash.

Bad Debt Risk

The risk that money owed to a company by debtors will not be paid and thus become a bad debt.