BUISENESS MANAGEMENT
FINANCIAL MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Financing short-term needs with short-term funds.
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Financing permanent inventory buildup with long-term debt.
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Financing seasonal needs with short-term funds.
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Financing some long-term needs with short-term funds.
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Detailed explanation-1: -2. Which of the following would be consistent with a more aggressive approach to financing working capital? Financing short-term needs with short-term funds.
Detailed explanation-2: -In Aggressiveness of Financing Policy (AFP) companies engaged elevated levels of short term assets and liabilities. or current natured liabilities and puts low level of investment in long term liabilities in contrast, conservative. financing policy consider more long-term debt.
Detailed explanation-3: -Which of the following would be consistent with an aggressive approach to financing working capital? Financing short-term needs with short-term funds.
Detailed explanation-4: -Which of the following would be consistent with a hedging (maturity matching) approach to financingworking capital? Your Answer:Financing short-term needs with short-term funds.
Detailed explanation-5: -Aggressive approach This means that the entity holds lower inventory levels, follows strict credit policies, keeps less cash balance, etc. Under this approach, current assets are maintained solely to just meet the current liabilities without cushioning for any variations in working capital requirements.