Holding All Other Factors Constant, If a Firm Increases Its

question 94

Multiple Choice

Holding all other factors constant, if a firm increases its current liabilities relative to total assets, an immediate effect will be that

• A)it increases return and reduces risk.its financing costs will rise.
• B)it has no effect on return and increases risknet working capital will rise.
• C)it reduces return and reduces risk.its current ratio will rise.
• D)it reduces return and increases risk.
• E)none of above are correct

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Definitions:

Conflict Resolution

Techniques and strategies used to address and resolve disagreements and disputes in a constructive manner.

Paraphrase

The act of rewording or rephrasing text or speech to achieve clearer understanding, often with different words but maintaining the original meaning.

Common Understanding

A shared agreement or knowledge among team members or stakeholders regarding certain terms, objectives, or processes.

Delegating Authority

The act of assigning decision-making power and tasks to subordinates in an organizational setup, enhancing efficiency and empowerment.