Generally speaking,which of the following situations will occur if a seasonal company adopts a compromise financial policy?
I.periods where short-term financing is required
II less long-term debt than if the firm followed a restrictive financial policy
III.periods of excess funds which can be invested in short-term marketable securities
IV.lower investment in fixed assets than if the firm adopted a flexible financial policy

Question

Quizplus · Accepted Answer

A compromise financial policy allows for a moderate amount of flexibility in financing decisions, balancing the needs for both short-term and long-term financing. This means that the company may require short-term financing in certain periods (I) but will also have excess funds that can be invested in short-term securities during other periods (III). Additionally, by adopting a compromise policy, the company will have less long-term debt than if it followed a restrictive policy (II). However, it is unlikely that a compromise financial policy would result in lower investment in fixed assets (IV), as this would be more influenced by the company's overall growth strategy and capital budgeting decisions.

Generally Speaking,which of the Following Situations Will Occur If a Seasonal