Which of the following best describes an aggressive financing policy?
A) financing part or all of the permanent working capital with short-term debt
B) financing part or all of the permanent working capital with long-term debt
C) financing part or all of the temporary working capital with short-term debt
D) financing part or all of the temporary working capital with long-term debt

Question

Quizplus · Accepted Answer

An aggressive financing policy involves financing the permanent working capital with short-term debt. This can lead to higher risks due to the fluctuating nature of short-term debt, but can also result in higher returns in a favorable business environment. Option B refers to a conservative financing policy, while options C and D refer to moderate financing policies.

Which of the Following Best Describes an Aggressive Financing Policy