Question No. 4

A firm has worth of tk 60 million as fixed asset, and tk 30million of current asset which remains constant for a certain period of time. The firms temporary current asset fluctuates from 10 to tk 20million. It takes short term loan of maximum tk 10million from the market and rest of the asset is financed by long term debt. Which approach is followed by the firm in Financing Current Assets? Explain with appropriate diagram.

7.5 Marks.