Which of the Following Firms Would Be Expected to Need

question 35

Multiple Choice

Which of the following firms would be expected to need the most cash to conduct its daily operations?

• A)a retail grocery store that sells on a cash only basis
• B)an airline that has many of its fares prepaid by cash or credit card
• C)an electronics manufacturer that only assembles its goods once they have been paid for
• D)an aircraft manufacturer with large inventory and long development and sales cycles

---

Definitions:

Equivalent Interest

The equal effectiveness of different interest rates with respect to compounding periods over a specified period.

Nearest 0.01%

Rounding or approximating a numerical value to the closest one-hundredth of a percent.

Interest Rate

The percentage charged on a loan or paid on an investment for the use of money, calculated on an annual basis.

Nearest 0.01%

Rounding to the closest one-hundredth of a percent to simplify precision in calculations or representations.