Which of the following statements is FALSE?

A.A firm could finance its shortterm needs with longterm debt, a practice known as a conservative financing policy.

B.An aggressive financing policy also increases the possibility that managers of the firm will use excess cash

nonproductivelyfor example, on perquisites for themselves.

C.To implement a conservative financing policy effectively, there will necessarily be periods when excess cash is

availablethose periods when the firm requires little or no investment in temporary working capital.

D.When following a conservative financing policy, a firm would use longterm sources of funds to finance its fixed assets, permanent working capital, and some of its seasonal needs.