Which of the Following Statements Is NOT CORRECT

question 102

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.

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Definitions:

Corporate Buyout

The acquisition of controlling shares in a company, often resulting in a change in management and strategy.

Blackout

A temporary loss of consciousness, electricity, or the obscuration of memory, often caused by power failures, medical conditions, or heavy drinking.

Consequences

The outcomes, effects, or results that naturally follow from an action or condition.

Power Outage

A temporary loss of electrical power in a particular area, which can be due to several reasons including technical failures or maintenance work.