Question

Bradford Maintenance, a firm which provides lawn care services, has some seasonal variations in its cash flow needs, since much of the demand for its services is in the summer months. It uses long-term sources of funds to finance its assets such as its fleet of vehicles and lawn-care equipment and for the permanent funds that it must have at all times. For its peak seasonal needs it uses long-term sources and some short-term debt. What best describes the financial policy being followed by Bradford

Answer 1

Answer: B) Conservative Financial Policy

Explanation:

A Conservative Financial policy refers to a situation where an entity usually finances their permanent working capital with long term debt in part or in it's entirety.

It is stated that Bradford Maintainance uses long-term sources of funds to finance its assets which would point to a Conservative Financial Policy.