An Effective Program of Working Capital Management Requires That

question 244

Multiple Choice

An effective program of working capital management requires that:

• A)the firm run with the absolute minimum in each current asset account.
• B)a series of cost/benefit tradeoffs be considered because running a business is easier with more working capital than with less, but holding working capital costs money.
• C)large inventories be maintained to adequately service customers.
• D)credit can be easily granted to customers to encourage higher sales.

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Definitions:

Diversity of Citizenship

A legal principle allowing federal courts to hear cases in which the parties are citizens of different states or countries.

Federal Substantive Law

Pertains to the body of law that creates, defines, and regulates the rights and duties of parties within the United States federal legal system.

State Substantive Law

Laws that govern how matters such as contracts, property, and family issues are to be handled within a state.

Federal Procedural Law

Rules that govern the procedures for courts and judicial administration within the federal legal system.