Assuming That We Can Earn a 10% Return on Accounts

Multiple Choice

Assuming that we can earn a 10% return on accounts receivable, which of the following strategies to finance an increase in our accounts receivable balance would be optimal?

A) An increase in bank loans that would cost us 8%
B) A decrease in inventories that are earning a 16% return
C) A reduction in marketable securities that are earning a return of 14%
D) An increase in accounts payable that would cost our firm 15%