For Many Firms the Limits on Capital Funds Are "Soft

question 41

True/False

For many firms the limits on capital funds are "soft." By this we mean that the capital rationing is not imposed by investors.

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Definitions:

Cash Increase

An increase in a company's cash flow, resulting from its operational, investing, or financial activities.

Cash Cycle

The duration between the initial cash outlay for the purchase of inventory and the collection of cash from customers from sales, essentially measuring the liquidity efficiency of a company.

Purchasing Inventory

The process of acquiring goods and materials that a business sells or uses in its production process, an essential component of supply chain management.

Fixed Asset Sale

The process of selling long-term assets, such as property, plant, and equipment, for cash or other compensation.