Which of the Following Working Capital Financing Policies Subjects the Firm

question 31

Multiple Choice

Which of the following working capital financing policies subjects the firm to the greatest risk?

• A) financing fluctuating current assets with long-term debt
• B) financing permanent current assets with long-term debt
• C) financing permanent current assets with short-term debt
• D) financing fluctuating current assets with short-term debt

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Definitions:

Steroid

Large family of lipids, including some reproductive hormones, vitamins, and cholesterol.

Phospholipids

A class of lipids that are a major component of all cell membranes, known for their bilayer formation that makes up the plasma membrane's structure.

Plasma Membranes

A double layer of lipids that surrounds the cytoplasm of a cell, controlling the entry and exit of materials.

Amino Acids

Organic substances that are fundamental in forming proteins, essential for the body's tissues and organs' structure, function, and regulation.