A Firm Which Uses the Aggressive Financing Strategy Plans to Purchase

Multiple Choice

A firm which uses the aggressive financing strategy plans to purchase raw materials in large quantities to take price discounts. The firm will finance the purchase with a loan. The most likely consequence of this action is

A) an increase in net working capital.
B) an increase in long-term debt.
C) an undetermined change in the current ratio.
D) a decrease in the current ratio.