Which of the Following Statements Is False

question 43

Multiple Choice

Which of the following statements is false?

• A) When following a conservative financing policy, a firm would use long-term sources of funds to finance its fixed assets, permanent working capital, and some of its seasonal needs.
• B) An aggressive financing policy also increases the possibility that managers of the firm will use this excess cash nonproductively-for example, on perquisites for themselves.
• C) A firm could finance its short-term needs with long-term debt, a practice known as a conservative financing policy.
• D) To implement a conservative financing policy effectively, there will necessarily be periods when excess cash is available-those periods when the firm requires little or no investment in temporary working capital.

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Definitions:

Personal Importance

The significance or value an individual places on a specific idea, activity, or possession in their life.

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Any object, event, or factor that can elicit or evoke a response from an organism or system.

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A mental state in which a person performing an activity is fully immersed in a feeling of energized focus, full involvement, and enjoyment.

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A comprehensive term for the condition of an individual or group, encompassing physical, psychological, and emotional health and happiness.