Firms following a restricted current asset investment policy:?
A. ?have uncertain sales and operations.
B. ?have relatively low levels of accounts receivable.
C. ?have a lower return on investment, especially on current assets.
D. ?have the longest cash conversion cycle in the industry.
E. ?have the highest inventory conversion in the industry.
Answer: B
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Under the___________basis of accounting, revenues are recognized when earned and expenses when incurred
Fill in the blank(s) with correct word
Capital investment analysis is also known as capital budgeting
Indicate whether the statement is true or false
In order to further investigate a franchise opportunity an entrepreneur can request a franchise package from the franchisor, which:
A. contains guarantees about expected sales revenues in years 1 and 2. B. is usually free. C. costs between $800 and $1000 and is usually not refundable. D. costs between $400 and $600 and is usually refundable.
Lilly's Corporation has working capital of $620,000, and Harmon Corporation has working capital of $840,000. Which of the following statements is incorrect?
A. If Lilly Corporation is smaller than Harmon or has lower current liabilities; Lilly could be more liquid than Harmon. B. Since working capital is an absolute amount, other factors such as size of the company and materiality will help to determine liquidity of these two companies. C. Since Harmon's working capital exceeds Lilly's working capital, it is safe to conclude that Harmon is more liquid than Lilly. D. None of these answers is correct.