If a firm anticipates stretching accounts payable, its cost of giving up a cash discount is reduced

Indicate whether the statement is true or false

TRUE

Business

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Potlatch Company manufactures sonars for fishing boats

Model 100 sells for $200. Potlatch produces and sells 5,000 units per year. Cost data are as follows: Variable manufacturing $95 per unit Variable selling and administrative $5 per unit Fixed manufacturing $270,000 per year Fixed selling and administrative $130,000 per year An offer has come in for a one-time sale of 300 units at a special price of $130 per unit. The marketing manager says that the sale will not affect the company's regular sales activities, and that it will not require any variable selling and administrative costs. The production manager says that there is plenty of excess capacity and the sale will not impact fixed costs in any way. What is the effect of this deal on operating income? A) Operating income increases by $200. B) Operating income increases by $1,500. C) Operating income decreases by $10,500. D) Operating income increases by $10,500.

Business

Which of the following is not an advantage of a general partnership?

A) Business losses can be deducted against the partners' other sources of income. B) The skills and abilities of more than one individual are available to the firm. C) The liquidity of each partner's investment is low. D) Creating one is relatively easy and inexpensive compared to a C corporation or limited liability company. E) It is not subject to double taxation.

Business