All Else Equal, Which of the Following Is the Most

question 129

Multiple Choice

All else equal, which of the following is the most likely to occur if actual sales are much less than forecasted sales?

• A) The company will be in a better position to pay down most of its debt.
• B) The firm's actual investment in inventory will be unchanged from the amount forecasted.
• C) Accounts receivable will rise significantly above the forecast.
• D) The company might face a cash flow crunch.

---

Definitions:

Congress

The national legislative body of the United States, consisting of the Senate and the House of Representatives.

Chapter 13

A form of bankruptcy in the United States that allows individuals with a regular income to develop a plan to repay all or part of their debts.

Repayment Plan

A strategy or arrangement agreed upon to pay back borrowed money, often detailing the time frame and amounts due.

Insolvent

The condition of being unable to pay debts as they fall due, or having liabilities that exceed the value of assets.