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A Firm Which Uses the Aggressive Financing Strategy Plans to Purchase

Question 121

Multiple Choice

A firm which uses the aggressive financing strategy plans to purchase raw materials in large quantities to take price discounts. The firm will finance the purchase with a loan. The most likely consequence of this action is


A) a decrease in the current ratio.
B) an increase in net working capital.
C) an undetermined change in the current ratio.
D) an increase in long-term debt.

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