A Firm Following an Aggressive Approach to Working Capital Policy

question 23

Multiple Choice

A firm following an aggressive approach to working capital policy will finance all of the fixed assets with __________,and some of the firm's permanent current assets will be financed with __________.

• A) short-term nonspontaneous sources of funds; long term capital
• B) commercial paper; long term capital
• C) long term capital; short-term nonspontaneous sources of funds
• D) long term capital; corporate bonds
• E) short-term nonspontaneous sources of funds; corporate bonds

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Definitions:

Homeostasis

The process by which biological systems maintain a stable internal environment despite changes in external conditions.

Drive

An innate, biologically determined urge to attain a goal or satisfy a need.

Delay Gratification

The ability to resist the temptation for an immediate reward and wait for a later, often greater reward.

Delay Gratification

The capacity to withstand the urge for an instant gratification in favor of a future reward.