In which one of the following situations will a firm require the most short-term financing?
A) A non-cyclical, constant growth firm following a flexible policy.
B) A cyclical, constant growth firm following a flexible policy.
C) A non-cyclical, irregular growth firm following a restrictive policy.
D) A cyclical, irregular growth firm following a restrictive policy.
E) A cyclical, irregular growth firm following a flexible policy.

Question

Quizplus · Accepted Answer

A cyclical, irregular growth firm following a restrictive policy will require the most short-term financing due to the unpredictability of its revenue streams and the restrictive policy limiting its access to long-term financing options. This combination makes the firm more reliant on short-term financing to manage cash flow fluctuations.

In Which One of the Following Situations Will a Firm