Which of the Following Is a False Statement as It

question 33

Multiple Choice

Which of the following is a false statement as it relates to analysis?

• A)Profitability may not be a major consideration as long as the resources for repayment can be projected.
• B)Equity capital provides creditors with a cushion against loss.
• C)There is a difference between the objectives that are sought by short-term grantors of credit and those sought by long-term grantors of credit.
• D)If merchandise with a 20% markup is sold on credit,it would take ten successful sales of the same amount to make up for one sale not collected.
• E)The financial structure of the entity is of interest to creditors.

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Definitions:

Outbreak

The sudden occurrence of a disease or an increase in the number of cases among a population.

Consequential Damages

Losses that do not flow directly from an act but only from some of the consequences or results of the act.

Lost Profits

Potential earnings that a business did not realize due to a breach of contract, negligence, or other wrongful acts.

Unconscionable

Referring to an agreement or action that is excessively unfair or unjust, often to the degree that it is deemed unenforceable in a court of law.