One major risk a firm assumes in an aggressive financing strategy is
A) the possibility that it will run out of cash.
B) the possibility that collections will be slower than expected.
C) the possibility that short-term funds may not be available when needed.
D) the possibility that long-term funds may not be available when needed.

Question

Quizplus · Accepted Answer

An aggressive financing strategy typically relies on short-term funds to finance operations and expansion. This means that the company may be at risk of not being able to obtain short-term funds when they are needed, leading to liquidity problems and potential insolvency. While options A, B, and D are also potential risks, they are not as directly related to an aggressive financing strategy as the risk of not being able to obtain short-term funds.

One Major Risk a Firm Assumes in an Aggressive Financing