If the Flotation Cost Goes Up, the Cost of Retained

question 8

Multiple Choice

If the flotation cost goes up, the cost of retained earnings will

• A) go up.
• B) go down.
• C) stay the same.
• D) slowly increase.

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Definitions:

Negotiable Instrument

An official paper that commits to paying a designated sum, either immediately upon request or at a predetermined date, clearly identifying the individual who will make the payment.

Drawer's Signature

is the signature of the person who has written and is responsible for the financial instrument, such as a check, authorizing its use and the payment it represents.

Customer's Negligence

A situation where a customer's failure to exercise reasonable care results in harm or damage.

Re-Credit

The process of restoring a previously deducted amount back into an account or credit rating.