Which one of the following is a working capital decision?
A)How should the firm raise additional capital to fund its expansion?
B)What debt-equity ratio is best suited to the firm?
C)What is the cost of debt financing?
D)Which type of debt is best suited to finance the inventory?
E)How much cash should the firm keep in reserve?

Question

Quizplus · Accepted Answer

Working capital decisions involve managing a company's day-to-day operations and short-term financial needs, such as managing inventory, accounts receivable, and cash. Therefore, the question of how much cash the firm should keep in reserve is a working capital decision. Choices A, B, C, and D refer to capital structure decisions and are not related to managing a company's working capital.

Which One of the Following Is a Working Capital Decision