Which of the Following Statements About Total Capital Requirement Is

question 54

Multiple Choice

Which of the following statements about total capital requirement is least likely to be correct for a profitable firm?

• A) Requirements remain constant over time.
• B) Seasonal variations are often experienced.
• C) The trend is often upward-sloping.
• D) A portion of working capital is permanent.

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Definitions:

Acquisition Cost

The total cost associated with acquiring a new asset or company, including purchase price and all other expenses.

Interest Costs

Interest costs refer to the expenses incurred by borrowing funds, represented as the cost of the interest payments on debt.

Retained Earnings

The portion of a company's profit that is held back and not distributed to shareholders as dividends, used for investment or paying off debt.