Which of the following situations would most likely exist if a firm adheres to a moderate current asset investment policy?

Question

A. The firm's level of accounts receivable is greater than its level of accounts payable.
B. Once equilibrium is attained, the amount of current assets will equal the amount of current liabilities.
C. The firm maintains relatively large amounts of current assets.
D. The firm holds minimum amounts of cash and marketable securities, inventories, and receivables.
E. The firm maintains a level of working capital that falls between the levels prescribed by the relaxed current asset investment policy and the restrictive current asset investment policy.

Answer 1

Answer: E