A Flexible Short-Term Financial Policy

question 57

Multiple Choice

A flexible short-term financial policy:
I.increases shortage costs due to frequent cash-outs.
II.tends to increase sales as compared to a restrictive policy.
III.requires a sizeable investment in current assets.
IV.incurs more carrying costs than a restrictive policy.

• A)I and IV only
• B)II and III only
• C)I, II, and III only
• D)II, III, and IV only
• E)I, III, and IV only

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Definitions:

Reinforcement

In behavioral psychology, a principle that strengthens a behavior by providing a consequence an individual finds rewarding.

Frequency

The rate at which a repeated event occurs over a specified period of time, often used in the context of waves or signals.

Negative Reinforcement

A technique used to increase the likelihood of a desired behavior by removing an unpleasant stimulus when the behavior occurs.

Positive Reinforcement

The process of encouraging a desired behavior by rewarding it, thereby increasing the likelihood of its recurrence.