Which of the Following Statements Is Correct

question 15

Multiple Choice

Which of the following statements is correct?

• A)If a firm has a very high fixed asset turnover, it means that the firm may be nearing its maximum production capacity.
• B)An extremely low average collection period will maximize net income.
• C)In general, a firm should strive for a high average payment period because it wants to pay for its purchases as quickly as possible.
• D)All of these statements are correct.

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Definitions:

Hindsight Bias

The tendency to believe, after learning an outcome, that one would have foreseen it, often referred to as the "I-knew-it-all-along" effect.

Just-World Phenomenon

The cognitive bias that a person's actions are inherently inclined to bring morally fair and fitting consequences to that individual, to the end of all noble actions are rewarded and evil actions are punished.

Scapegoating

The practice of singling out any party for unmerited negative treatment or blame.

Other-Race Effect

The tendency to more easily recognize faces of one's own race, compared to faces of other races, often attributed to social and cognitive factors.