Assuming That We Can Earn a 13

question 63

Multiple Choice

Assuming that we can earn a 13.5% return on accounts receivable,which of the following actions to finance an increase in our accounts receivable balance would be optimal?

• A) A reduction in marketable securities which are earning a return of 14.2%
• B) A decrease in inventories which are earning a 17.6% return
• C) An increase in bank loans that would cost us 11.5%
• D) An increase in accounts payable that would cost our firm 15%

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Definitions:

Monosaccharides

Simple sugars that are the most basic form of carbohydrates, consisting of a single sugar molecule and serving as energy sources and building blocks for more complex carbohydrates.

Glucose

A simple sugar that is an important energy source in living organisms and is a component of many carbohydrates.

Galactose

A simple sugar (monosaccharide) that, along with glucose, makes up lactose, the primary sugar in milk.

Five-Membered Ring

A ring structure consisting of five atoms, common in various organic compounds and crucial in the study of organic chemistry.