Which of the Following Statements Is NOT CORRECT

question 124

Multiple Choice

Which of the following statements is NOT CORRECT?

• A) Commercial paper can be issued by virtually any firm so long as it is willing to pay the going interest rate.
• B) Accruals are "free" in the sense that no explicit interest is paid on these funds.
• C) A conservative approach to working capital management will result in most if not all permanent assets being financed with long-term capital.
• D) The risk to a firm that borrows with short-term credit is usually greater than if it borrowed using long-term debt.This added risk stems from the greater variability of interest costs on short-term debt and possible difficulties with rolling over short-term debt.
• E) Bank loans generally carry a higher interest rate than commercial paper.

---

Definitions:

Categories

Divisions or classifications of items, concepts, or information based on shared characteristics or criteria.

Internal Referencing Strategy

A method used within documents or presentations that involves referring back to previously mentioned points or sections for clarity or emphasis.

IRS

Stands for Internal Revenue Service, the U.S. government agency responsible for tax collection and tax law enforcement.

Declarative Learning

A cognitive process through which individuals acquire facts and information that can be explicitly stated or described.