A flexible short-term financial policy:

a. tends to lower the selling prices that can be charged versus the prices under a restrictive policy.

b. tends to cause more production interruptions than does a restrictive policy due to inventory shortages.

c. tends to indicate that the carrying costs of a firm are relatively high as compared to the shortage costs.

d. lowers the costs of maintaining current assets.

e. tends to increase the cash inflows of a firm in the future more so than a restrictive policy does.