A flExible Short-Term fiNancial Policy

question 402

Multiple Choice

A flexible short-term financial policy:

• A) Increases the likelihood that a firm will face financial distress.
• B) Incurs an opportunity cost due to the rate of return that applies to short-term assets.
• C) Advocates a smaller investment in net working capital than a restrictive policy does.
• D) Increases the probability that a firm will earn high returns on all of its assets.
• E) Utilizes short-term financing to fund all of the firm's assets.

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Definitions:

Learning To Say No

The skill of setting personal or professional boundaries, making it possible to prioritize tasks and manage time effectively.

Scenario Planning

Scenario planning is a strategic planning method used to make flexible long-term plans based on different possible future conditions.

Individuals

Refers to single human beings, considered separately from their collective memberships or identities.

Contingency Planning

The process of preparing for unexpected events or circumstances that could disrupt operations.