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 long-term 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.
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 long-term 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.