Which of the following statements is CORRECT?
A. Net working capital is defined as operating current assets minus the difference between current liabilities and notes payable, and any increase in the current ratio automatically indicates that net working capital has increased.
B. Although short-term interest rates have historically averaged less than long-term rates, the heavy use of short-term debt is considered to be an aggressive strategy because of the inherent risks associated with using short-term financing.
C. If a company follows a policy of "matching maturities", this means that it matches its use of common stock with its use of long-term debt as opposed to short-term debt.
D. Net working capital is defined as operating current assets minus the difference between current liabilities and notes payable, and any decrease in the current ratio automatically indicates that net working capital has decreased.
E. If a company follows a policy of "matching maturities", this means that it matches its use of short-term debt with its use of long-term debt.
Answer: B
You might also like to view...
An advertisement stating that a new product offers "freedom and comfort along with $20 savings per month" is using
A) an emotional appeal. B) an analogy. C) an inductive appeal. D) both logical and emotional appeals. E) circular reasoning.
After reading statistics about bullying in the workplace, Omari, a manager, decides to make sure it is adequately addressed in his own department. What should Omari’s first move be?
a. Announce that he is adopting a no-tolerance policy toward maltreatment by employees. b. Ask employees if there are any offenders who should be targeted. c. Make sure hiring process weed out those with bullying tendencies. d. Do a self-assessment to make sure he has no bullying tendencies himself.
Which of the following is NOT one of the four steps involved in the process of ethical decision- making?
A. identifying the ethical nature of an issue B. establishing ethical intent C. selecting an ethical framework to apply D. making an ethical judgment
Very often, the problems associated with this type of decision will be complex in nature with few past occurrences for employees to draw on.
What will be an ideal response?