MCQOPTIONS
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| 1. |
-Under a conservative financing policy a firm would use long-term financing to finance some of the temporary current assets. What should the firm do when a "dip" in temporary current assets causes total assets to fall below the total longterm financing? |
| A. | use the excess funds to pay down long-term debt. |
| B. | invest the excess long-term financing in marketable securities. |
| C. | use the excess funds to repurchase common stock. |
| D. | purchase additional plant and equipment. |
| Answer» C. use the excess funds to repurchase common stock. | |