If a Profitable Firm Finds That It Simply Must "Stretch

question 112

True/False

If a profitable firm finds that it simply must "stretch" its accounts payable, then this suggests that it is undercapitalized, i.e., that it needs more working capital to support its operations.

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Definitions:

Compliance

The act of conforming, submitting, or adapting one's actions to another's wishes, rules, or regulations.

Referent Group

A group to which an individual or another group is compared, often for the purpose of evaluating and understanding one's own attitudes, values, and behaviors.

In-Group

A group in society with which an individual psychologically feels a sense of belonging.

Out-Group

A social group towards which a person feels a sense of competition or opposition.