Which of the Following Statements Is FALSE

question 27

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.

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Definitions:

Dred Scott Decision

The Dred Scott Decision was a controversial 1857 U.S. Supreme Court ruling that declared African Americans, whether enslaved or free, could not be American citizens and had no standing to sue in federal court.

Slave Power

A term used to describe the perceived political power held by slave owners in the United States prior to the Civil War, influencing legislation and policy to protect and expand slavery.

Chief Justice Roger Taney

The fifth Chief Justice of the United States, known for his controversial decision in the Dred Scott v. Sandford case, which stated that African Americans could not be American citizens.

Fugitive Slave Act

Legislation passed in 1850 in the United States that required the return of escaped slaves to their owners, regardless of the state where they were found.