Maximizing shareholder wealth by investing in accounts receivables is considered when ____.
I. marginal costs are exceeded by marginal returns.
II. the cost of the funds invested are exceeded by expected marginal returns.
A) Only statement I is correct.
B) Only statement II is correct.
C) Both statements I and II are correct.
D) Neither statement I nor II is correct.

Question

Maximizing shareholder wealth by investing in accounts receivables is considered when ____. 
I. marginal costs are exceeded by marginal returns.
II. the cost of the funds invested are exceeded by expected marginal returns.
A) Only statement I is correct.
B) Only statement II is correct.
C) Both statements I and II are correct.
D) Neither statement I nor II is correct.

Quizplus · Accepted Answer

Both statements I and II are correct. Maximizing shareholder wealth by investing in accounts receivables is considered when the marginal returns exceed the marginal costs and the expected marginal returns exceed the cost of the funds invested. This means that the company is generating profits and cash flows from its investments in accounts receivables, which will ultimately increase shareholder value.

Maximizing Shareholder Wealth by Investing in Accounts Receivables Is Considered