CAF-7 · Chapter 12 · Question 5 of 15
A company adopts an aggressive working capital financing policy. Which of the following best describes this policy?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Financing all fluctuating current assets and a portion of permanent current assets with short-term finance
Explanation
An aggressive working capital policy relies heavily on cheaper (but riskier) short-term finance. Under this policy, short-term finance is used to fund all fluctuating current assets and a portion of the permanent current assets.
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