Assuming That We Can Earn a 10% Return on Accounts

question 51

Multiple Choice

Assuming that we can earn a 10% return on accounts receivable, which of the following actions to finance an increase in our accounts receivable balance would be optimal?

• A) An increase in bank loans that would cost us 8%.
• B) A decrease in inventories which are earning a 16% return.
• C) A reduction in marketable securities which are earning a return of 14%.
• D) An increase in accounts payable that would cost our firm 15%.