Question

which of the following stateents is consistent with the balance sheet model of a firm a....

which of the following stateents is consistent with the balance sheet model of a firm
a. longterm investment decision
b. shareholder value equals long term liabilities minus short term liabilities
c. long term asset minus short term assets measures relative stability of the firm
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Answer #1

The correct answer is C.

Explanation

The Long term assets are those in which the firms invests for the purpose of long term earnings though production of goods or rendering of services.

The current assets are assets which are held for short term like stock in trade or debtirs etc.,

The firm which invests in long term assets show that the it is confident of its future growth and they are expected to earn with better growth than competitiors.

So C is the correct answer.

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