If a Firm Is Involuntarily "Stretching" Its Accounts Payable Then

question 86

True/False

If a firm is involuntarily "stretching" its accounts payable then this is one sign that it is undercapitalized, that is, that it needs more working capital for operations.

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Definitions:

Small Denomination Time Deposits

Bank deposits that are held for a fixed term with a specified small minimum amount and earn interest over time.

Large Denomination Time Deposits

Time deposits in a bank or financial institution with a large minimum amount of money required, typically over $100,000, and a fixed term.

M2

A measure of the money supply that includes cash, checking deposits, and easily convertible near money, such as savings deposits, small time deposits, and money market mutual funds.

M3

A measure of the money supply that includes M2 plus large time deposits, institutional money market funds, and other larger liquid assets.