​Risk Response Net Benefit Is Measured as The

question 66

Multiple Choice

​Risk response net benefit is measured as the:

• A) ​difference between an inherent risk and a residual risk produced by a particular risk response.
• B) sum of an inherent risk and a residual risk produced by a particular risk response.
• C) ​benefit of risk response minus the cost of risk response.
• D) ​difference between the incremental cost incurred by a company to implement a particular risk response and the residual risk.

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Definitions:

Net Working Capital

The difference between a company's current assets and current liabilities, indicating the liquidity of the business.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or the operating cycle, whichever is longer.

Revolving Credit Agreement

A banking agreement that allows the borrower to withdraw, repay, and redraw loans advanced to them up to a specified amount.

Line of Credit

An arrangement between a financial institution and a customer that establishes a maximum loan balance that the borrower can access.