The Objective of Managing Current Assets and Liabilities Is to

question 152

Multiple Choice

The objective of managing current assets and liabilities is to

• A)achieve as low a level of current assets as possible.
• B)achieve as low a level of current liabilities as possible.
• C)achieve a balance between profitability and risk that contributes to the firm's value.
• D)achieve as high a level of current liabilities as possible.
• E)none of the above

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Definitions:

Foreclosed

A legal process in which a lender attempts to recover the balance of a loan from a borrower who has failed to make payments, by forcing the sale of the asset used as the collateral for the loan.

Mortgage Payments

Regular payments made towards the principal and interest of a mortgage loan, often on a monthly basis, to pay off the borrowed amount over time.

Security Interest

A legal right or claim on property, granted to a creditor, ensuring the property serves as collateral for a debt and can be repossessed if the debt is not repaid.

Security Agreement

A legal document that provides a lender a security interest in a specified asset or property that is pledged as collateral for a loan.