Which One of the Following Transactions Will Increase the Liquidity

question 2

Multiple Choice

Which one of the following transactions will increase the liquidity of a firm?

• A)Cash purchase of new production equipment
• B)Payment of an account payable
• C)Cash purchase of inventory
• D)Credit sale of inventory at cost
• E)Cash payment of employee wages

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Definitions:

BAT Model

The BAT Model, or Behaviorally Anchored Rating Scale, is a method used in performance management to rate and evaluate employees' behaviors against specific examples that are anchored to numerical ratings.

Optimal Initial Balance

The ideal starting amount of money in an investment or financial account, determined based on goals, risk tolerance, and other financial considerations.

BAT Model

A strategic management tool that helps in the assessment of the strategic position of a business and its potential future path.

Interest Rate

The percentage charged on the total amount you borrow or earn on an investment, typically expressed annually.