A firm has an interval measure of 48. This means that the firm has sufficient liquid assets to do which one of the following?
A) Pay all of its debts that are due within the next 48 hours
B) Pay all of its debts that are due within the next 48 days
C) Cover its operating costs for the next 48 hours
D) Cover its operating costs for the next 48 days
E) Meet the demands of its customers for the next 48 hours

Question

Quizplus · Accepted Answer

An interval measure refers to the number of days or hours that a firm's liquid assets can cover its operating costs. In this case, the firm has an interval measure of 48, which means it has enough liquid assets to cover its operating costs for the next 48 days. Therefore, option D is the correct answer. Option A and E are too specific and do not reflect the full extent of the firm's financial flexibility. Option B is too broad, as the interval measure only applies to operating costs, not all debts. Option C is closer to the correct answer, but 48 hours is too short of a period and may not cover all of the firm's operating costs.

A Firm Has an Interval Measure of 48