Under conservative funding strategy, short-term financing is used only to finance an emergency, an unexpected outflow of funds, and the variable portion of a firm's current assets.

Question

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Under a conservative funding strategy, a firm finances its permanent assets and possibly some part of its temporary assets with long-term financing, not just for emergencies or unexpected outflows. Short-term financing under this strategy is used more cautiously.

Under Conservative Funding Strategy, Short-Term Financing Is Used Only to Finance