The Aggressive Financing Strategy Is Risky in Two Respects: the Firm

question 142

Multiple Choice

The aggressive financing strategy is risky in two respects: the firm operates with a low level of ___________,and the firm has only a limited amount of ___________capacity.

• A) current assets; long-term borrowing
• B) net working capital; long-term borrowing
• C) net working capital; short-term borrowing
• D) current liabilities; short-term borrowing

---

Definitions:

Negative Income Tax

A system of social welfare that provides income to individuals or families below a certain income level, effectively supplementing their income.

Medicaid

A government-sponsored insurance program in the United States providing health care coverage to low-income individuals and families.

Libertarians

Individuals who advocate for minimal government intervention in personal and economic affairs, emphasizing individual liberty and free markets.

Individual Rights

The basic entitlements and freedoms that belong to every person, typically upheld by law and societal norms, including rights to privacy, speech, and equal treatment.