Which of the Following Statements Is Incorrect

question 133

Multiple Choice

Which of the following statements is incorrect?

• A) Commercial paper can be issued by virtually any firm so long as it is willing to pay the going interest rate.
• B) Accruals are "free" in the sense that no explicit interest is paid on these funds.
• C) A conservative approach to working capital will result in all permanent assets being financed using long-term securities.
• D) The risk to the firm of borrowing with short-term credit is usually greater than with long-term debt. Added risk can stem from greater variability of interest costs on short-term debt.
• E) Bank loans have a lower interest rate than commercial paper.

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Definitions:

Canadian Dollar

The official currency of Canada, often symbolized as CAD or denoted by the dollar sign '$' with a distinguishing C to indicate Canadian currency.

All-Inclusive Package

A package deal, often offered by resorts and tour operators, that includes all related costs like accommodation, meals, and services in one price.

Travel Agent

A professional who arranges travel plans and accommodations for clients.

American Airlines

A major American airline headquartered in Fort Worth, Texas, known for its extensive domestic and international network.