Assuming That We Can Earn a 10% Return on Accounts

question 28

Multiple Choice

Assuming that we can earn a 10% return on accounts receivable, which of the following strategies 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 that are earning a 16% return
• C) A reduction in marketable securities that are earning a return of 14%
• D) An increase in accounts payable that would cost our firm 15%

---

Definitions:

Social And Cultural Rules

Norms and guidelines that govern behaviors within societies and groups, often dictating what is considered acceptable or taboo.

Hans Selye

A Hungarian-Canadian endocrinologist who is recognized for his research on the effects of stress on the human body and for developing the concept of the General Adaptation Syndrome.

Chronic Hypertension

A condition where an individual has persistently high blood pressure over a long period, often leading to health complications.

Exhaustion Phase

The final stage of the body's response to prolonged stress, characterized by depleted energy reserves and diminished resistance to illness.