Which One of the Following Statements Is NOT Correct

question 18

Multiple Choice

Which one of the following statements is NOT correct?

• A) A leveraged firm is riskier than a firm that has no leverage.
• B) A leveraged firm is less risky than a firm that has no leverage.
• C) A firm that uses debt magnifies the return to its shareholders.
• D) A firm that does not use debt incurs opportunity cost of increasing value of shares.

Identify strategies to achieve objectivity and impartiality during decision making.

Identify and mitigate cognitive biases and risks in the decision-making process.

Distinguish between the different phases of dominance structuring and their specific precautions.

Apply critical thinking strategies to improve decision-making processes.

---

Definitions:

Credit Sales

Sales transactions where the payment is deferred to a future date, typically involving a credit agreement.

Collection Schedule

A plan or timetable for collecting receivables from customers, detailing the timing of payments to be received.

Uncollectible

Refers to accounts receivable or debts that are deemed unlikely to be collected and may be written off as bad debts.

Budgeted Sales

Forecasted sales figures used for planning purposes, reflecting the expected amount of revenue a company aims to generate in a specific period.