Question

Which of the following situations would most likely exist if a firm adheres to a moderate current asset investment policy?
Group of answer choices

The firm maintains relatively large amounts of current assets.

Once equilibrium is attained, the amount of current assets will equal the amount of current liabilities.

The firm's level of accounts receivable is greater than its level of accounts payable.

The firm holds minimum amounts of cash and marketable securities, inventories, and receivables.

The firm maintains a level of working capital that falls between the levels prescribed by the relaxed current asset investment policy and the restrictive current asset investment policy.

Answer 1

The Answer is last option :- The firm maintains a level of working capital that falls between the levels prescribed by the relaxed current asset investment policy and the restrictive current asset investment policy.

( Explanation- Moderate current asset investment policy is somewhere between Relaxed current asset investment policy and the Restrictive current asset investment policy, where under relaxed current asset policy, a large amount of current assets are kept by the company and on the contrary under restricted current asset policy, a minimal amount of current assets are kept by the company. And under Moderate current asset investment policy, the company maintains a level in between these two.