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MN recently took out a 5 year term loan to buy raw materials to take advantage of a supplier's bulk discount that had been offered to them.
What approach to financing working capital has MN undertaken?
Suggested Answer: C
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12 comments · newest first
MO
Mozell
3 months ago
But what about B) Moderate? They might be balancing risk with opportunity.
CA
Carol
3 months ago
I agree, A) Aggressive makes sense. They're leveraging debt for discounts.
HA
Hailey
3 months ago
I think it's A) Aggressive. They took a loan for bulk buying.
GL
Glory
3 months ago
Definitely aggressive, but it could pay off if they manage it right.
AR
Arlette
3 months ago
Wait, a 5-year loan for raw materials? That seems risky!
HY
Hyman
4 months ago
I’m not so sure, could be moderate too.
CA
Carisa
5 months ago
Totally agree, they’re taking a big risk.
RO
Rory
5 months ago
Sounds like an aggressive approach to me!
RA
Raina
6 months ago
I feel like this could also be seen as a conservative approach since they are securing resources for the long term, but I need to double-check the definitions.
MO
Mona
6 months ago
I’m leaning towards the aggressive option because they’re using debt to capitalize on a discount, but I could be mixing it up with another example we studied.
SH
Shakira
6 months ago
This seems like a moderate approach to financing working capital, but I remember a practice question that had a similar scenario and it was classified differently.
JA
Jamal
6 months ago
I think MN's approach might be aggressive since they took a loan for raw materials, but I'm not entirely sure.