An aggressive approach to working capital financing, in which the firm uses short- term debt to finance all current assets, would usually result in higher net income than a conservative approach if:

Question

Quizplus · Accepted Answer

An aggressive approach to working capital financing involves using short-term debt to finance all current assets. This approach usually results in higher net income than a conservative approach when short-term interest rates fall because the cost of borrowing is lower, thereby reducing the firm's interest expenses and increasing its net income.

An Aggressive Approach to Working Capital Financing, in Which the Firm