Which of the Following Statements Is NOT CORRECT

question 108

Multiple Choice

Which of the following statements is NOT CORRECT?

• A) Accruals are "free" in the sense that no explicit interest is paid on these funds.
• B) A conservative approach to working capital management will result in most, if not all, permanent current operating assets being financed with long-term capital.
• C) The risk to a firm that borrows with short-term credit is usually greater than if it borrowed using long-term debt.This added risk stems from the greater variability of interest costs on short-term debt and possible difficulties with rolling over short-term debt.
• D) Bank loans generally carry a higher interest rate than commercial paper.
• E) Commercial paper can be issued by virtually any firm so long as it is willing to pay the going interest rate.

---

Definitions:

Kyphosis

A condition characterized by an excessive outward curvature of the spine, leading to a hunchback or slouching posture.

Lordosis

A curvature of the spine resulting in an exaggerated inward curve, typically in the lower back, leading to a distinctive posture.

Cervical Bones

Refers to the seven vertebrae in the neck that make up the upper part of the spinal column.

Lumbar

Relating to the lower part of the back.