Creditors Prefer a ________ Level of Cash Inflows and ________

question 86

Multiple Choice

Creditors prefer a ________ level of cash inflows and ________ level of cash outflows.

• A) low; low
• B) high; low
• C) high; high
• D) medium; low

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Definitions:

Known Principal

A principal whose identity is disclosed to the third party by the agent at the time of a particular transaction.

Agent Liability

The legal responsibility of an agent to act in the best interest of their principal, facing consequences for failure to comply.

Apparent Authority

The power that a third party perceives an agent to have, based on the principal's representations, leading the third party to reasonably believe that the agent is authorized.

Undisclosed Principal

A person whose existence is unknown to the third party in a contract made by an agent on their behalf.