Which of the following factors affect the firm's level of investment in working capital?

Question

Quizplus · Accepted Answer

All of the above factors affect the firm's level of investment in working capital. The length of the operating cycle determines how long a company needs to maintain its working capital. The firm's sales level determines how much working capital is needed to finance its operations. Inventory and credit policies also affect the firm's investment in working capital as they determine how much inventory is held and how much credit is extended to customers, impacting the level of cash the company needs to maintain.

Which of the Following Factors Affect the Firm's Level of Investment