Which of the Following Statements Is CORRECT

question 29

Multiple Choice

Which of the following statements is CORRECT?

• A) Under normal conditions,a firm's expected ROE would probably be higher if it financed with short-term rather than with long-term debt,but using short-term debt would probably increase the firm's risk.
• B) Conservative firms generally use no short-term debt and thus have zero current liabilities.
• C) A short-term loan can usually be obtained more quickly than a long-term loan,but the cost of short-term debt is normally higher than that of long-term debt.
• D) If a firm that can borrow from its bank at a 6% interest rate buys materials on terms of 2/10,net 30,and if it must pay by Day 30 or else be cut off,then we would expect to see zero accounts payable on its balance sheet.
• E) If one of your firm's customers is "stretching" its accounts payable,this may be a nuisance but it will not have an adverse financial impact on your firm if the customer periodically pays off its entire balance.

Analyze the longer-term effects of various taxes, including corporate profits tax.

Identify the progression or regression of various types of taxes.

Understand the concept and consequences of anticipatory breach in contract law.

Recognize and distinguish between different types of breaches in contract law (minor, major, fundamental).

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Definitions:

Natural Selection

A process by which organisms better adapted to their environment tend to survive and produce more offspring, driving the evolution of species.

Hardy-Weinberg Equilibrium

A principle stating that the genetic variation in a population will remain constant from one generation to the next in the absence of disturbing factors.

Allele Frequencies

The relative frequency of alleles (variations of a gene) within a population.

Dominant Gene

A dominant gene is an allele that expresses its phenotype even in the presence of another allele, effectively masking the effects of a recessive allele.