Which of the Following Statements Is NOT CORRECT

question 17

Multiple Choice

Which of the following statements is NOT CORRECT?

• A) accruals are "free" in the sense that no explicit interest is paid on these funds.
• B) a conservative approach to working capital management will result in most, if not all, permanent current operating assets being financed with long-term capital.
• C) the risk to a firm that borrows with short-term credit is usually greater than if it borrowed using long-term debt. this added risk stems from the greater variability of interest costs on short-term debt and possible difficulties with rolling over short-term debt.
• D) bank loans generally carry a higher interest rate than commercial paper.
• E) commercial paper can be issued by virtually any firm so long as it is willing to pay the going interest rate.

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Definitions:

Warning Lamp

A visual indicator on the dashboard of a vehicle that alerts the driver to various issues or malfunctions.

Detonation

An uncontrolled, explosive ignition of fuel in an engine's cylinder, causing damage and reducing efficiency.

EGR System

An Exhaust Gas Recirculation System helps reduce nitrogen oxide emissions by recirculating a portion of an engine's exhaust gas back to the engine cylinders.

Air/Fuel Ratio

The ratio of air to fuel in an internal combustion engine, crucial for efficient performance and emissions control.