1. All else equal, a firm that purchases raw materials on credit will experience:
a. a decrease in trade credit with a given increase in purchases
b. no change in trade credit with a given increase in purchases.
c. an increase in trade credit with a given increases in puchases.
d. no change in trade credit with a given decrease in purchases.
e. an increase in trade credit with a given decrease in purchases.
2. Which of the following is the most likely to result in a positive cash flow to creditors?
a. Borrowing more money b. issuing shares of stock c. Purchasing fixed assets with cash. d. Paying off existing debt e. investing for the future