Asked by Mckenna Grimm on Jul 12, 2024
Verified
A conservative financing approach to working capital will result in most of the permanent net operating working capital being financed by long-term securities.
Conservative Financing
A strategy prioritizing lower risk financing options, typically involving higher equity and lower debt levels to minimize insolvency risks.
Long-term Securities
Financial instruments that typically have a maturity period of more than one year and are used to finance longer-term investments.
- Acquire knowledge on the strategies for administering and financing operating capital, including the utilization of marketable securities.
- Apprehend the criteria that lead to the selection of short-term against long-term financing methods.
Verified Answer
AC
Araceli CarmonaJul 17, 2024
Final Answer :
True
Explanation :
A conservative financing approach will prioritize long-term financing for permanent net operating working capital. This helps to provide stability and reduce risk for the company's short-term liquidity needs.
Learning Objectives
- Acquire knowledge on the strategies for administering and financing operating capital, including the utilization of marketable securities.
- Apprehend the criteria that lead to the selection of short-term against long-term financing methods.
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