Which of the Following Statements Is TRUE

question 54

Multiple Choice

Which of the following statements is TRUE?

• A) The lure of stock market riches gives entrepreneurs an incentive to develop new products.
• B) Stock markets allow incompetent managers to be replaced by more competent managers.
• C) Stock prices provide information on whether the firm is making good decisions.
• D) All of these statements are true.

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Definitions:

Collection Period

A metric that measures the length of time it takes for a business to convert its accounts receivable into cash.

Accounts Receivable Balance

The combined total of receivables a business has from its customers for goods or services that have been consumed but remain unpaid.

Calendar Year

The period of time from January 1 to December 31 in the Gregorian calendar.

Sales Estimate

An approximation of the number or monetary value of sales that a company expects to achieve within a certain period.