A Firm's Working Capital Position Is Important from an Internal

question 74

Multiple Choice

A firm's working capital position is important from an internal and external standpoint. Which of the following is not true?

• A) It measures a firm's risk.
• B) Provisions for a minimum working capital position are often included in restrictive covenants.
• C) A firm's policy often affects its ability to obtain debt.
• D) A working capital position determines its level of common stock sales.

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Definitions:

Nativism

The psychological theory that certain abilities or knowledge are innate and not acquired through learning or experience.

Learning Theory

A framework that describes how individuals absorb, process, and retain knowledge or skills through experience, study, or teaching.

Articles and Prepositions

Words used in language to specify grammatical relationships, with articles defining specificity (a, an, the) and prepositions indicating relationships in space and time (in, on, at).

Syntax

The set of rules, principles, and processes that govern the structure of sentences in a given language, especially in terms of word order and punctuation.