Asked by Donna Mowell on Apr 28, 2024
Verified
Which of the following working capital financing policies subjects the firm to the greatest risk?
A) Financing temporary working capital with long-term debt
B) Financing permanent working capital with long-term debt
C) Financing permanent working capital with short-term debt
D) Financing temporary working capital with short-term debt
Working Capital Financing Policies
Strategies that manage the short-term assets and liabilities to ensure a company has adequate funds to meet its operational needs.
Permanent Working Capital
The minimum amount of investment in current assets that a company needs to sustain its business operations.
Short-Term Debt
Describes obligations and loans that are due to be paid back within a year.
- Comprehend the impact of ambitious working capital approaches and their risk factors.
Verified Answer
Learning Objectives
- Comprehend the impact of ambitious working capital approaches and their risk factors.
Related questions
The Aggressive Approach to the Financing of a Firm's Current ...
Which of the Following Is Not an Element of Working ...
Minimizing Cash Holdings,inventories,or Receivables,and Maximizing Payables or Accruals Are the ...
Accruals Are Spontaneous,but,unfortunately,due to Law and Economic Forces,firms Have Little ...
Which Statement Best Describes Working Capital Financing Policy ...