Which of the Following Statements Is False

question 22

Multiple Choice

Which of the following statements is false?

• A) Under the Modigliani-Miller assumptions of perfect capital markets, the amounts of payables and receivables are irrelevant.
• B) One factor that contributes to the length of a firm's receivables and payables is the delay between the time a bill is paid and the cash is actually received.
• C) Collection float is the amount of time it takes before payments to suppliers actually result in a cash outflow for the firm.
• D) The credit that the firm is extending to its customer is known as trade credit.

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Definitions:

Economic Model

A simplified representation of economic processes, often using mathematical formulas or graphs, to analyze behavior and predict outcomes.

Inductive Reasoning

A method of reasoning in which a conclusion is reached based on the observation of specific instances or patterns.

Variable Theory

A conceptual framework that outlines how variables interact within a particular study or model.

Normative Economics

A branch of economics that expresses value judgments about economic fairness or what the outcome of the economy or goals of public policy ought to be.