When a ﬁrm makes decisions regarding its investment in inventory and accounts receivable it is making a ________________ decision.

Question

Quizplus · Accepted Answer

The decision on inventory and accounts receivable is related to the management of working capital, which refers to the short-term assets and liabilities of a company. The management of working capital aims to ensure that a company can operate smoothly by maintaining adequate levels of inventory and accounts receivable while keeping the costs of financing these assets low. Therefore, the correct answer is working capital, which is option D. The other options are not relevant to this decision.

When a ﬁRm Makes Decisions Regarding Its Investment in Inventory