Essentials of Corporate Finance
Essentials of Corporate Finance
8th Edition
ISBN: 9780078034756
Author: Stephen A. Ross, Randolph W. Westerfield, Bradford D. Jordan
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 16.3, Problem 16.3ACQ
Summary Introduction

To discuss: The factors that determines the most favorable size’s of investment in current assets of the firm.

Introduction:

The firm adopts various short-term financial policies that measures the part of short term and long-term debt used in current assets.

  • Restrictive shorter financial policy is the high portion of short-term debt comparatively to long term debt.
  • Flexible policy is the low portion of short term debt comparatively to long term debt.

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