Certain financing plans are termed conservative when
A) short-term financing is used frequently.
B) working capital is relatively low.
C) risk is increased.
D) working capital is relatively high.

Question

Quizplus · Accepted Answer

Conservative financing plans typically involve having a relatively high level of working capital, which ensures that the company has enough funds to cover its short-term obligations and unforeseen expenses. This approach minimizes risk and provides a greater sense of financial stability. Therefore, Option D is the correct answer.

Certain Financing Plans Are Termed Conservative When