Which of the Following Statements Is CORRECT

question 35

Multiple Choice

Which of the following statements is CORRECT?

• A) Conservative firms generally use no short-term debt and thus have zero current liabilities.
• B) A short-term loan can usually be obtained more quickly than a long-term loan, but the cost of short-term debt is normally higher than that of long-term debt.
• C) If a firm that can borrow from its bank at a 6% interest rate buys materials on terms of 2/10 net 30, and if it must pay by Day 30 or else be cut off, then we would expect to see zero accounts payable on its balance sheet.
• D) If one of your firm's customers is "stretching" its accounts payable, this may be a nuisance but it will not have an adverse financial impact on your firm if the customer periodically pays off its entire balance.
• E) Under normal conditions, a firm's expected ROE would probably be higher if it financed with short-term rather than with long-term debt, but using short-term debt would probably increase the firm's risk.

Understand the phases of decision making according to Galotti.

Grasp the concept of calibration curve and its relevance in assessing decision accuracy.

Recognize the effects of cognitive biases and illusions on decision-making processes.

Comprehend the fundamental differences between deductive and inductive reasoning and their outcomes.

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Definitions:

Token Economy

A behavior modification system that utilizes tokens as a form of reinforcement for desirable behaviors, which can be exchanged for rewards.

Variable Interval Schedule

A reinforcement strategy in operant conditioning where a response is rewarded after an unpredictable amount of time has passed.

Dopamine Activity

Involves the action of the neurotransmitter dopamine in the brain, affecting mood, sleep, learning, and motor control.

Insight Learning

A type of learning that occurs suddenly through understanding the relationships between various parts of a problem, leading to the solution.