Pakistan's best MCQs practice hub — FPSC · PPSC · CSS · NTS · Other Exams
Login

Which working capital financing strategy finances all fixed assets and permanent current assets with long-term capital, financing temporary current assets with short-term debt?

AMaturity Matching (Hedging) Approach
BCapital Rationing Approach
CConservative Approach
DAggressive Approach

Explanation

* Maturity Matching (Hedging Approach) matches asset maturities with debt maturities: permanent assets funded with long-term debt, seasonal assets with short-term debt.
* Balances liquidity risk against interest expense optimization.
* Prevents refinancing risk during short-term credit contractions.

Exam Relevance
  • Topic: Working Capital Management
  • Subtopic: Financing Strategies
Submitted by: mcqstutor Team More Finance & Accounting MCQs →

No Comments

Leave a comment

Your email address will not be published. Required fields are marked *