Which of the Following Statements Is CORRECT

question 38

Multiple Choice

Which of the following statements is CORRECT?

• A) If a firm has high current and quick ratios,then it must be managing its liquidity position well.
• B) If a firm sold some inventory for cash and left the funds in its bank account,then its current ratio would probably not change much,but its quick ratio would decline.
• C) If a firm sold some inventory on credit,then its current ratio would probably not change much,but its quick ratio would decline.
• D) If a firm sold some inventory on credit as opposed to cash,then there is no reason to think that either its current or quick ratio would change.
• E) The inventory turnover ratio and days sales outstanding (DSO)are two ratios that are used to assess how effectively a firm is managing its current assets.

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Definitions:

Generalizability

The extent to which the findings of a study or experiment can be applied to larger populations or different contexts beyond the original subjects or conditions studied.

Validity

The extent to which a test, measurement, or research accurately reflects or assesses the specific concept that it is intended to measure.

Constructability

A project management technique that reviews construction processes from start to finish during pre-construction phase to ensure efficient and feasible construction.

Predictive Validity

The extent to which a score on a scale or test predicts future performance on a related outcome.