Question

Which one of the following terms is defined as the mixture of a firm's debt and equity financing?

Select one:

a. capital budgeting

b. cash management

c. working capital management

d. capital structure

Answer 1

a. capital budgeting: This is hte process of analysing whether a project is worth investing by conducting NPV, IRR and similar analysis. So this is the wrong option

b. Cash management: This is the process of monitoring and altering cash levels to the appropriate level. So this is incorrect option

c. working capital management: This is the process of increasing current liabilities and decreasing current assets to have sufficient liquidity. So this is incorrect option

d. capital structure: This shows the mix of debt and equity of a firm. So this is the correct option