Which of the Following Could Offset the Higher Risk Exposure

question 52

Multiple Choice

Which of the following could offset the higher risk exposure a company would face if its current ratio and net working capital were relatively low?

• A) Its current assets would need to be highly liquid.
• B) Its accounts receivable collection policy could increase the average collection period.
• C) It could offer no discounts for early payment by its customers.
• D) It could buy back some of its shares in the open market in order to reduce its equity.

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Definitions:

Deliver In Person

The act of physically handing over a document or item directly to the intended recipient, rather than using mail or electronic means.

Justify

To provide reasons or evidence in support of an argument, action, or decision.

Direct Strategy

A communication approach that involves stating the main point or objective at the beginning, often used when the message is not contentious or when clarity is paramount.

Neutral Statement

A comment or statement that is unbiased and does not express a strong opinion or lean towards any particular stance or viewpoint.