Which of the Following Statements Is CORRECT

question 125

Multiple Choice

Which of the following statements is CORRECT?

• A) Accruals are an expensive but commonly used way to finance working capital.
• B) A conservative financing policy is one where the firm finances part of its fixed assets with short-term capital and all of its net working capital with short-term funds.
• C) If a company receives trade credit under terms of 2/10,net 30,this implies that the company has 10 days of free trade credit.
• D) One cannot tell if a firm has a conservative,aggressive,or moderate current asset financing policy without an examination of its cash budget.
• E) If a firm has a relatively aggressive current asset financing policy vis-à-vis other firms in its industry,then its current ratio will probably be relatively high.

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Definitions:

Energy Alternatives

Renewable and sustainable energy sources used in place of traditional fossil fuels, such as solar, wind, and hydro power.

Net Energy

The amount of energy available from a resource after subtracting the energy spent to obtain, process, and distribute it.

Thermodynamics

A branch of physics that deals with the relationships between heat and other forms of energy, and how these affect matter.

Conservation

The practice of protecting natural resources and the environment through preservation, management, and restoration efforts to prevent degradation.