Which of the Following Statements Is False

question 9

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) If the firm can obtain a bank loan at a lower interest rate, it would be better off borrowing at the lower rate and using the cash proceeds of the loan to take advantage of the discount offered by the supplier.
• 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 customers is known as trade credit.

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Definitions:

Canadian Shield

A large geological shield covered by a thin layer of soil that spans across eastern and central Canada, known for its rich mineral deposits.

Metallic Minerals

Natural mineral formations containing sufficient metal to be beneficially extracted and technically feasible to mine.

Microorganisms

Tiny living organisms, such as bacteria, viruses, and fungi, that can only be seen under a microscope.

Mining

Mining is the extraction of valuable minerals or other geological materials from the Earth, usually from an orebody, lode, vein, seam, reef, or placer deposit.