Which of the Following Statements Is Not True

question 18

Multiple Choice

Which of the following statements is not true?

• A) Net working capital is the difference between short-term assets and short term liabilities.
• B) Short-term financing deals with the management of short-term liabilities and short-term assets.
• C) Short-term financing is concerned with determining reasonable amounts of cash to hold, which customers should get credit and others related issues.
• D) Net working capital does not utilize the concept of present value since all flows are short-term.

Understand the importance of equity investments and personal assets in securing financing.

Understand the concept of duality in consumer theory and how it relates to utility maximization.

Identify and apply the principle of equal marginal utility per dollar spent across goods.

Comprehend and apply the concept of the Lagrange multiplier in the context of constrained optimization problems.

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Definitions:

Par Value

The nominal or face value of a bond, share of stock, or coupon as stated by the issuer, which is not related to its market value.

Moody's

A credit rating agency that evaluates the creditworthiness of borrowers, ranging from governments to private enterprises, and assigns ratings that reflect the risk of default.

Junk Bonds

High-risk, high-yield bonds rated below investment grade by credit rating agencies, often issued by companies with poorer credit ratings.

High-yield

Bonds that offer higher interest rates because they have lower credit ratings, reflecting a higher risk of default.