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:

Relative Price

The price of one good or service compared to another, usually considered in terms of opportunity cost.

Demand for Labor

The aggregate number of employees that employers intend and can employ at a particular rate of wages over a certain interval.

Total Product Schedule

A table or graph that shows the output produced by a firm with different quantities of variable input, holding all other inputs constant.

Market Wage Rate

The prevailing rate of pay for given types of labor in the market, determined by supply and demand.