The restrictive current asset management strategy is a high-risk, high-return alternative to the flexible strategy because of

Question

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The restrictive current asset management strategy involves holding relatively low levels of current assets, such as cash, inventory, and accounts receivable. This can lead to financial shortage costs if the company is unable to meet its short-term financial obligations or take advantage of unexpected opportunities due to a lack of liquidity. However, the strategy also offers the potential for higher returns, as the company can invest its resources in more profitable long-term projects. Production and human resources shortage costs are not directly related to the current asset management strategy.

The Restrictive Current Asset Management Strategy Is a High-Risk, High-Return