Which of the Following Statements Is NOT CORRECT

question 43

Multiple Choice

Which of the following statements is NOT CORRECT?

• A) A company may hold a relatively large amount of cash and marketable securities if it is uncertain about its volume of sales,profits,and cash flows during the coming year.
• B) Credit policy has an impact on working capital because it influences both sales and the time before receivables are collected.
• C) The cash budget is useful to help estimate future financing needs,especially the need for short-term working capital loans.
• D) If a firm wants to generate more cash flow from operations in the next month or two,it could change its credit policy from 2/10,net 30 to net 60.
• E) Managing working capital is important because it influences financing decisions and the firm's profitability.

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Definitions:

Actual Authority

The power that an agent or representative is formally granted by a principal or entity to conduct business on their behalf.

Dissolved

Refers to the process of a substance becoming incorporated into a liquid, resulting in a solution.

Notice

Officially informing someone of a fact or situation, often required by law or agreement for certain actions.

Statute of Frauds

A legal concept that requires certain types of contracts to be in writing and signed by the party to be charged, to prevent fraud and perjuries.