Which of the Following Statements Is False

question 3

Multiple Choice

Which of the following statements is false?

• A) The matching principle indicates that the firm should finance permanent working capital with short-term sources of funds.
• B) Following the matching principle should, in the long run, help minimize a firm's transaction costs.
• C) In a perfect capital market, the choice of financing is irrelevant; thus how the firm chooses to finance its short-term cash needs cannot affect value.
• D) A portion of a firm's investment in its accounts receivable and inventory is temporary and results from seasonal fluctuations in the firm's business or unanticipated shocks.

---

Definitions:

Thermometer

An instrument for measuring and indicating temperature, commonly used in healthcare to monitor body temperature.

Hyperthermia

Situation in which body temperature exceeds the set point.

Thermoregulatory Mechanisms

Physiological processes that maintain the body's internal temperature within a normal healthy range, regardless of external conditions.

Unresponsive

A state in which a person is not reacting to stimuli or commands, often indicating a serious medical condition.