Which of These Principles of Cash Managements Is Untrue

question 34

Multiple Choice

Which of these principles of cash managements is untrue?

• A) There are disadvantages for a business in holding very low levels of inventory.
• B) The longer the operating cycle the longer it takes to pay creditors.
• C) It is generally a mistake to delay paying creditors if it means discounts on offer are lost.
• D) Generally cash surplus to requirements should be used to acquire necessary non-current assets rather than being kept on fixed deposit.

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Definitions:

Sample Proportion

The fraction of the sample that displays a certain property or characteristic.

Null Hypothesis

The null hypothesis is a statement used in statistical testing that proposes there is no significant difference or effect, serving as the default assumption to be tested against.

Level of Significance

The threshold below which a p-value is considered statistically significant, typically set at 0.05 or 5%, indicating the probability of rejecting the null hypothesis when it is true.

Point Estimate

A single value (statistic) given as the best guess or most reasonable approximation of a population parameter based on sample data.