a flexible short-term financial policy

a. increases the likelihood that a firm will face financial distress.

b. increases that probability that a firm will earn high returns on all of its assets.

c. advocates a smaller investment in net working capital than a restrictive policy does.

d. utilizes short-term financing to fund all of the firm's assets.

e. incurs an opportunity cost due to the rate of return that applies to short-term assets.