With regard to the hedging principle, which of the following assets should

With regard to the hedging principle, which of the following assets should be financed with current liabilities?
a.Minimum level of cash required for year-round operations
b.Expansion of accounts receivable to meet seasonal demands
c.Machinery used to produce a firm’s inventory
d.Both a and b
e.Both b and c
The hedging principle is a matching technique, which matches the cashflows for an asset with the costs of acquiring the asset. Current liabilities are debt that mature within a year.

 

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