Asked by Maricarmen Fierros on Jul 22, 2024
Verified
A restrictive short-term financial policy, as compared to a more flexible policy, tends to increase the sales of a firm due to the firm's credit availability and terms.
Restrictive Policy
Measures or guidelines implemented to limit certain activities or behaviors, often for regulatory, safety, or quality reasons.
Credit Availability
The extent to which individuals and businesses can obtain loans or credit from financial institutions.
- Recognize the impact of short-term financial policies on a firm's liquidity and operations.
- Distinguish between restrictive and flexible short-term financial policies.
- Comprehend the relationship between firm policies and sales, cash-out situations, and inventory levels.
Verified Answer
CM
Courtney MorganJul 23, 2024
Final Answer :
False
Explanation :
A restrictive short-term financial policy typically involves tighter credit terms and reduced credit availability, which can actually deter sales rather than increase them, as customers may find it harder to purchase on credit.
Learning Objectives
- Recognize the impact of short-term financial policies on a firm's liquidity and operations.
- Distinguish between restrictive and flexible short-term financial policies.
- Comprehend the relationship between firm policies and sales, cash-out situations, and inventory levels.
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