Liberal credit policy creates a problem of bad debts.

Question

Options

True
False

MCQ

True or False

Solution

This statement is True.

Explanation:

If the firm does not get a credit facility for purchases but adopts a liberal credit policy for its sales, it requires more working capital. On the other hand, if credit terms of purchases are favourable and terms of credit sales are less liberal, then the cash requirement will be less.

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Capital Requirements

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Q 1. D) 9.Q 1. D) 8.Q 1. D) 10.

Chapter 1: Introduction To Corporate Finance - Exercises [Page 12]

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Balbharati Secretarial Practice [English] Standard 12 Maharashtra State Board

Chapter 1 Introduction To Corporate Finance
Exercises | Q 1. D) 9. | Page 12

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