Which of the Following Statements Is Most Correct

question 71

Multiple Choice

Which of the following statements is most correct?

• A) Net working capital may be defined as current assets minus current liabilities.Any increase in the current ratio will automatically lead to an increase in net working capital.
• B) Although short-term interest rates have historically averaged less than long-term rates,the heavy use of short-term debt is considered to be an aggressive strategy because of the inherent risks of using short-term financing.
• C) If a company follows a policy of "matching maturities," this means that it matches its use of common stock with its use of long-term debt as opposed to short-term debt.
• D) Each of the above statements is true.
• E) Each of the above statements is false.

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Definitions:

Achievement Behavior

Actions oriented towards accomplishing specific goals or meeting standards of excellence.

Cultural Difference

The varying beliefs, behaviors, languages, practices, and expressions considered unique to members of a specific ethnicity, society, or nation.

External Standards

Criteria or benchmarks that originate outside of an individual or process, used for comparison or evaluation purposes.

Internal Standards

The personal criteria or benchmarks one uses for behavior, which are developed based on one’s values and beliefs.