Which of the Following Statements Is FALSE

question 19

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 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:

Tertiary Alcohol

An alcohol in which the hydroxy functional group (OH) is bonded to a carbon atom connected to three other carbon atoms.

IUPAC Name

The systematic naming of chemical compounds based on the rules established by the International Union of Pure and Applied Chemistry.

Wood Alcohol

Another term for methanol, a simple alcohol that is used as a solvent, antifreeze, or fuel, and is dangerous to consume.

Methanol

A simple alcohol with the formula CH3OH, used as a solvent, antifreeze, fuel, and as a feedstock in chemical synthesis.