Basically the overall working capital policy decision involves a ____ of alternative policies.

Question

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The overall working capital policy decision involves a profit-risk tradeoff among alternative policies. This is because the decision of how much to invest in working capital involves balancing the desire to maximize profits with the need to minimize risk. A policy that minimizes risk may not generate as much profit as a policy that takes on more risk, but the latter may increase the likelihood of financial distress. Therefore, the optimal working capital policy should seek to strike a balance between profit and risk.

Basically the Overall Working Capital Policy Decision Involves a ____