True or False ( Please explain 2 and 4, the rest I just want to double check my

ID: 2813049 • Letter: T

Question

True or False (Please explain 2 and 4, the rest I just want to double check my answers)

1. Solvency describes a company's ability to meet its short-term financial obligations while remaining a viable business.

2. Credit terms of 3/15 net 30 means that a buyer can take a 3% discount off their bill if the entire bill is paid in 30 days or less.

3. Operating accruals are a spontaneous source of financing.

4. Net working capital is best interpreted as a measure of solvency.

5. The cash conversion cycle must be positive since it is measured in days.

1- true

2- False - discount of 3% would be availed if payment is made within 15 days

3-True

4- True- it is a measure of short term solvency

5- True

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.