Which of the Following Statements Is NOT CORRECT

question 124

Multiple Choice

Which of the following statements is NOT CORRECT?

• A) Commercial paper can be issued by virtually any firm so long as it is willing to pay the going interest rate.
• B) Accruals are "free" in the sense that no explicit interest is paid on these funds.
• C) A conservative approach to working capital management will result in most if not all permanent assets being financed with long-term capital.
• D) 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.
• E) Bank loans generally carry a higher interest rate than commercial paper.

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Definitions:

Wage

The fixed regular payment made by an employer to an employee, typically expressed on an hourly, daily, or piecework basis.

Bonus

An additional payment or reward given to employees or organizations, often as an incentive or reward for performance.

Management By Objectives (MBO)

Systematic approach that allows managers to focus on attainable goals and to achieve the best results based on the organization’s resources.

Performance Evaluation

The systematic assessment of an employee's job performance, skills, and productivity, typically for the purpose of decisions about promotions, compensation, and development.