Operating and financial flexibility refers to a company’s ability to A. adjust to unexpected downturns in the economic environment in which it operates or to take advantage of profitable investment opportunities as they arise. B. generate sufficient cash flows to maintain its productive capacity and still meet interest and principal payments on long-term debt. C. readily convert assets to cash relative to how soon liabilities will have to be paid in cash. D. increase sales.

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Operating and financial flexibility refers to a company’s ability to
A. adjust to unexpected downturns in the economic environment in which it operates or to take advantage of profitable investment opportunities as they arise.
B. generate sufficient cash flows to maintain its productive capacity and still meet interest and principal payments on long-term debt.
C. readily convert assets to cash relative to how soon liabilities will have to be paid in cash.
D. increase sales.

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Answer:

A. adjust to unexpected downturns in the economic environment in which it operates or to take advantage of profitable investment opportunities as they arise.

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