A firm that follows a restricted current asset investment policy generally has:

Question

Quizplus · Accepted Answer

A restricted current asset investment policy typically involves maintaining low levels of inventory and accounts receivable in order to minimize the amount of cash tied up in current assets. This policy may be appropriate for a firm with relatively stable sales or a strong cash position, as the reduced investment in current assets can lead to lower return on investment. However, by minimizing accounts receivable, the firm may also be limiting its ability to extend credit to customers and increase sales.

A Firm That Follows a Restricted Current Asset Investment Policy