If Working Capital Is Allowed to Increase to an Inappropriately

question 9

Multiple Choice

If working capital is allowed to increase to an inappropriately high level:

• A)it can reduce the average rate of return on equity.
• B)there will be an opportunity cost of doing so
• C)all of the options are true
• D)it can reduce the average rate of return on assets

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Definitions:

Diverticulosis

The condition of having diverticula in the colon, which are small bulges or pouches that can form in the digestive tract wall.

GI Tract

The gastrointestinal tract, an organ system responsible for transporting and digesting foodstuffs, absorbing nutrients, and expelling waste.

Mucus

A sticky, slippery substance produced by mucous membranes and glands, used to moisten, protect, and trap particles in the airways, digestive system, and other areas.

Digested First

A methodology or process in which material, typically information or data, is simplified or broken down before further analysis or use.