All Else Equal, Which of the Following Is the Most

question 129

Multiple Choice

All else equal, which of the following is the most likely to occur if actual sales are much less than forecasted sales?

• A) The company will be in a better position to pay down most of its debt.
• B) The firm's actual investment in inventory will be unchanged from the amount forecasted.
• C) Accounts receivable will rise significantly above the forecast.
• D) The company might face a cash flow crunch.

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Definitions:

Basic Question

A fundamental inquiry that establishes the underlying principles or elements of a topic or issue.

Distribution of Income

The way in which a nation’s total earnings are divided among its population, or how the nation's wealth is shared among individuals.

Production

The process of creating goods and services to satisfy consumer demand.

Fair

An event characterized by the exhibition and sale of goods or the display of entertainment, or the adherence to equitable principles in judgments and treatments.