The three main working capital strategies discussed in the text, aggressive, conservative, and moderate, differ primarily in the
A)Relative amount of short-term debt used.
B)Minimum level of permanent current assets.
C)Relative amount of long-term debt versus equity used to finance permanent current assets.
D)Average level of temporary current assets.
E)Amount of trade credit used.

Question

Quizplus · Accepted Answer

The main difference between the three working capital strategies is the relative amount of short-term debt used. Aggressive strategy uses more short-term debt to finance operations, moderate strategy uses a mix of short-term debt and internally generated funds, while conservative strategy uses more internal funds and less short-term debt. Therefore, the best choice is A.

The Three Main Working Capital Strategies Discussed in the Text