Firms following a relaxed current asset policy are likely to __________ holdings of cash and have a __________ credit policy on sales.

Question

Quizplus · Accepted Answer

A relaxed current asset policy means that the firm will hold more cash and maintain higher levels of inventory and accounts receivable. A liberal credit policy on sales means that the firm is offering more relaxed payment terms, which would lead to an increase in accounts receivable.

Firms Following a Relaxed Current Asset Policy Are Likely to __________