MINDTAP Chapter Review 15-Working Capital Management Due on Dec 7 at 11:59 PM PS

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MINDTAP Chapter Review 15-Working Capital Management Due on Dec 7 at 11:59 PM PST Keep the Highest: 14 Attempts Aa Aa 4. Current asset financing policies Permanent current assets are necessary for firms to maintain their Firms manage a variety of current assets. businesses, and they will be carried even through downturns in business cycles. Temporary current assets fluctuate easonally or with business cycles. Firms must devise a financing strategy that best fits their business situation and that best manages their risk. Use the following table to identify the different current asset financing policies. Description Financing Policy Long-term capital finances all permanent assets, but short-term debt finances temporary current assets This current asset financing policy exposes the firm to the greatest amount of risk from rising interest rates and loan renewal problems. Long-term capital finances all fixed assets and the nonseasonal tsas nell s seasonal needs of current Maturity matching approach Aggressive approach Conservative approach Suppose a firm wants to take advantage of an upward-sloping yield curve. If the firm believes that interest rates will and it wants to use the current yield curve to bolster profits, which approach should the firm follow? O Conservative approach O Maturity matching approach O Aggressive approach Continue without saving

Explanation / Answer

1)Maturity matching approach
2)Aggresive approach
3)Conservative approach

It has to go with aggresive approach

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