8. Which of the following would be consistent with a more aggressive approach to financing working capital? a. Financing permanent needs with short-term funds. b. Financing permanent inventory buildup with long-term debt. c. Financing temporary needs with short-term funds. d. Financing some temporary needs with long-term funds.

8. Which of the following would be consistent with a more aggressive approach to financing working capital? a. Financing permanent needs with short-term funds. b. Financing permanent inventory buildup with long-term debt. c. Financing temporary needs with short-term funds. d. Financing some temporary needs with long-term funds.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 10QTD

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7. A component of working capital that involves decision on whom to extend credit, the credit limit, and the credit terms a. cash management b. inventory management c. receivable management d. payables management 8. Which of the following would be consistent with a more aggressive approach to financing working capital? a. Financing permanent needs with short-term funds. b. Financing permanent inventory buildup with long-term debt. c. Financing temporary needs with short-term funds. d. Financing some temporary needs with long-term funds. 9. The length of time between the acquisition of inventory and payment for it is called the a. Operating cycle. b. Inventory conversion period. c. Accounts receivable period. d. Accounts payable deferral period.
QUESTION 17 Which of the following is consistent with a conservative approach to financing working capital? financing short term needs with short term funds financing short term needs with long term debt financing seasonal needs with short term funds financing some long term needs with short term funds
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Which of the following is a problem with using payback period for capital budgeting decisions bias against long term projects in favor of short term projects bias against short term projects in favor of long term projects time value of money conceptual violation
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Which of the following statements relating to working capital financing is not correct? A. A conservative policy uses long-term debt to finance non-current assets. B. Short-term debt is cheaper than long-term debt. C. An aggressive policy uses long-term debt to finance fluctuating current assets. D. Long-term debt is less risky that short-term debt.