A Supplier,who Requires Payment Within Ten Days,is Most Concerned with Which

question 67

Multiple Choice

A supplier,who requires payment within ten days,is most concerned with which one of the following ratios when granting credit?

• A) current
• B) cash
• C) debt-equity
• D) quick
• E) total debt

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Definitions:

Optimal Initial Cash Balance

The ideal amount of money a business should hold at the start to minimize costs while avoiding liquidity issues.

Cash Outflow

The movement of money out of a business or financial account, typically as payment for expenses, assets, or liabilities.

Fixed Cost

A business expense that does not vary with the level of goods or services produced over the short term.

Interest Rate

The rate, expressed as a percentage of the principal amount, that a borrower must pay to a lender to use their assets.