Which of the Following Statements Is Most Correct

question 123

Multiple Choice

Which of the following statements is most correct?

• A) The financial crisis and recession of 2007-2009 had little effect on the ability of borrower firms to obtain short-term financing and for firms with surplus funds to invest in short-term instruments.
• B) The financial crisis and recession of 2007-2009 had strong effects on the ability of borrower firms to obtain short-term financing and for firms with surplus funds to invest in short-term instruments.
• C) The financial crisis and recession of 2007-2009 had strong effects on the ability of borrower firms to obtain short-term financing but made it easy for firms with surplus funds to invest in short-term instruments.
• D) The financial crisis and recession of 2007-2009 had little effect on the ability of borrower firms to obtain short-term financing but made it easy for firms with surplus funds to invest in short-term instruments.

---

Definitions:

Cost-volume-profit Analysis

A financial accounting technique that calculates how variations in costs and sales volume impact a firm's profitability.

Fixed Costs

Fixed costs are expenses that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.

Variable Costs

Expenses that change in proportion with the level of business activity or production volume, such as raw materials and direct labor costs.

Target Income

The desired profit level that a company aims to achieve within a specific period, often used in budgeting and financial planning.