Which of the Following Statements Is Generally Incorrect from an Investor's

question 38

Multiple Choice

Which of the following statements is generally incorrect from an investor's perspective?

• A) A 1:1 current ratio is generally preferred over a 1.5:1 current ratio.
• B) A 20-day average collection period for accounts receivable is generally preferred over a 30-day average collection period.
• C) A 5% dividend yield is generally preferred over a 3% dividend yield.
• D) A 10% net margin is generally preferred over an 8% net margin.

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Definitions:

Spermatic Cord

Cord formed by the ductus deferens and its associated structures; extends through the inguinal canal into the scrotum.

Ductus Deferens

A tube that carries sperm from the epididymis to the ejaculatory ducts in the male reproductive system.

Ejaculatory Duct

Duct formed by the union of the ductus deferens and the excretory duct of the seminal vesicle; opens into the prostatic urethra.

Epididymis

A long, coiled tube that is connected to the posterior surface of the testis, responsible for storing and transporting sperm cells that are produced in the testes.