Assignment 15-Working Capital Management Due Today at 11:59 PM CST DOLLARS Long-

Question

Assignment 15-Working Capital Management Due Today at 11:59 PM CST DOLLARS Long-term Financing Asset Requirements TIME Which of the following best characterizes this firm's policy of financing assets? O Moderate policy O Aggressive policy O Conservative policy e? Note the shaded region on the preceding graph. Which of the following statements best describes the firm's situation during this tim O The firm must rely on short-term borrowing O The firm has excess capital to invest in cash or marketable securitiés.

Explanation / Answer

Conservative policy

In the diagram, the curved line represents temporary working capital. Straight line indicates, Long term financing.

The straight line is passing through the middle of curves. That means some part of fluactuating working capital ( current assets) are financing by long term financing. This is taking too much care of working capital. This is called conservative policy.

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