Asked by Khánh Tr??ng on Jul 11, 2024
Verified
A flexible policy requires more short-term bank loans than does a restrictive policy.
Flexible Policy
A strategy or approach that is adaptable and able to change in response to external conditions or new information.
Short-Term Bank Loans
Borrowings from banks that are scheduled to be repaid within a year.
- Realize the significance of short-term financial management in affecting a corporation's liquidity and operational procedures.
- Highlight the distinctions between restrictive and flexible short-term financial practices.
- Grasp the mechanisms of short-term financing and the role of marketable securities.
Verified Answer
RR
Randa RegesJul 17, 2024
Final Answer :
False
Explanation :
A flexible policy typically involves maintaining higher levels of current assets, which can reduce the need for short-term bank loans, whereas a restrictive policy keeps lower levels of current assets and might increase the reliance on short-term financing to meet sudden needs.
Learning Objectives
- Realize the significance of short-term financial management in affecting a corporation's liquidity and operational procedures.
- Highlight the distinctions between restrictive and flexible short-term financial practices.
- Grasp the mechanisms of short-term financing and the role of marketable securities.
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