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%.

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Definitions:

Psychiatric Problems

Mental health conditions that affect a person's thinking, feeling, behavior, and interaction with others.

Cultural Background

The cultural context and environment a person is raised in, including traditions, languages, beliefs, and practices that influence their worldview.

Freud

Sigmund Freud, an Austrian neurologist and the founder of psychoanalysis, a clinical method for treating psychopathology through dialogue between a patient and a psychoanalyst.

Human Nature

Fundamental traits, behaviors, and feelings that are inherent to human beings, often considered a combination of inherited and societal factors.