Which of the Following Statements Is NOT CORRECT

question 43

Multiple Choice

Which of the following statements is NOT CORRECT?

• A) A company may hold a relatively large amount of cash and marketable securities if it is uncertain about its volume of sales,profits,and cash flows during the coming year.
• B) Credit policy has an impact on working capital because it influences both sales and the time before receivables are collected.
• C) The cash budget is useful to help estimate future financing needs,especially the need for short-term working capital loans.
• D) If a firm wants to generate more cash flow from operations in the next month or two,it could change its credit policy from 2/10,net 30 to net 60.
• E) Managing working capital is important because it influences financing decisions and the firm's profitability.

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Definitions:

Diathesis-Stress Model

The Diathesis-Stress Model is a psychological theory that explains behavior as a predispositional vulnerability together with stress from life experiences, contributing to mental disorders.

Biologically Vulnerable

Refers to individuals or organisms that have an increased risk of developing health problems due to genetic, physiological, or environmental factors.

DSM-5

The Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition, a comprehensive classification system for mental disorders used by mental health professionals in the U.S.

Factual Basis

Factual basis refers to the underlying real facts or data that support a statement, argument, or hypothesis.