The Objective of Managing Current Assets and Liabilities Is to

question 103

Multiple Choice

The objective of managing current assets and liabilities is to

• A)achieve as low a level of current assets as possible.
• B)achieve as low a level of current liabilities as possible.
• C)achieve a balance between profitability and risk that detracts from the firm's value.
• D)achieve as high a level of current liabilities as possible.
• E)none of the above

---

Definitions:

Price Elasticity

A measure of how much the quantity demanded of a good changes in response to a change in the price of that good.

Substitute Goods

Products or services that can serve as replacements for each other; when the price of one increases, the demand for the alternative is likely to increase.

Time Available

The total hours or minutes that can be allocated to certain activities or tasks within a given period.

Price-Elastic

Refers to a situation where the demand for a product changes significantly in response to a change in price.