Which of the Following Statements Is Most Correct

question 71

Multiple Choice

Which of the following statements is most correct?

• A) Net working capital may be defined as current assets minus current liabilities.Any increase in the current ratio will automatically lead to an increase in net working capital.
• B) Although short-term interest rates have historically averaged less than long-term rates,the heavy use of short-term debt is considered to be an aggressive strategy because of the inherent risks of using short-term financing.
• C) If a company follows a policy of "matching maturities," this means that it matches its use of common stock with its use of long-term debt as opposed to short-term debt.
• D) Each of the above statements is true.
• E) Each of the above statements is false.

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Definitions:

Psychological Payoff

The benefit, often unconscious, that individuals derive from maintaining certain behaviors or psychological states.

Transactional Analysis

A psychoanalytic theory and method of therapy wherein social transactions are analyzed to determine the ego state of the communicator as a basis for understanding behavior.

Transaction

An instance of buying or selling something; in psychology, it can also refer to an interaction or exchange between people.

Strokes

A term used in psychology to describe a unit of recognition or attention that one person gives another, often used in transactional analysis.