Which one of the following is a working capital decision?
A) How should the firm raise additional capital to fund its expansion?
B) What debt-equity ratio is best suited to our firm?
C) What is the cost of debt financing?
D) Which type of debt is best suited to finance our inventory?
E) How much cash should the firm keep in reserve?

Question

Quizplus · Accepted Answer

Working capital decisions are related to the daily operations and include decisions related to managing current assets and liabilities. The question "how much cash should the firm keep in reserve?" is related to managing the current asset of cash and is, therefore, a working capital decision. The other options listed are related to financing decisions and capital structure decisions, which are not considered working capital decisions.

Which One of the Following Is a Working Capital Decision