6. Which of the following statements is correct?

A)The flexible current asset investment strategy has a high percent of current assets to sales, is generally perceived to be a low-risk and low-return course of action.

B)All the answers are correct.

C)The restrictive current asset investment strategy promotes a liberal trade credit policy for customers.

D)A flexible current asset investment strategy calls for levels of current assets kept to a minimum.

E) Inventories in the balance sheet represent the amount owed by customers who have availed themselves of the firms trade credit facility.

7. Which of the following statements is incorrect?

A)Under the maturity matching working capital funding strategy, short-term debt to finance all seasonal working capital, a portion of the permanent working capital and fixed assets.

B)If shortage costs dominate carrying costs, the firm will need to move toward a more flexible policy.

D)All the answers are correct except one.

D)A restrictive current asset investment strategy calls for a firm barely investing in cash, marketable securities and inventory.

E)The cash conversion cycle is the length of time between the cash outflow for materials and the cash inflow from sales.