Flum Packages, Inc -If the Firm Was to Shift $2,000 of Current Liabilities

question 87

Multiple Choice

Flum Packages, Inc.

$\begin{array}{lrlr}\text { Assets }&&\text { Liabilities \& Equity }\\\hline \text { Current assets } & \$ 10,000 & \text { Current Liabilities } & \$ 5,000 \\\text { Fixed assets } & 20,000 & \text { Long-term debt } & 12,000 \\& & \text { Equity } & 13,000\\&----&&---\\\text { Total }&\$30,000&\text { Total }&\$30,000\\\end{array}$
-If the firm was to shift $2,000 of current liabilities to long-term funds, the firm's net working capital would_________the annual cost of financing would_________, and the risk of technical insolvency would_________, respectively.

• A) decrease; decrease; increase
• B) increase; increase; decrease
• C) increase; decrease; decrease
• D) decrease; increase; decrease

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Definitions:

Dissociative Identity Disorder

An extreme type of dissociation, a psychological function, leading to a disconnection in an individual's thinking, memory, and identity perception.

Socio-Cognitive Model

The theory that dissociative identity disorder is a form of role-playing in which individuals come to construe themselves as possessing multiple selves and then begin to act in ways consistent with their or their therapist’s conception of the disorder.

Nick Spanos

A psychologist known for his research on hypnosis, social influence, and the sociocognitive model of dissociative identity disorder.

DID

Stands for Dissociative Identity Disorder, a psychological condition characterized by the presence of two or more distinct personality states or identities within a single individual.