orking Capital Management aded Assignment | Read Chapter 15 | Back to Assignment Due Thursday 08.02.18 at 114 Attempts: Keep the Highest: /3 2. Current asset investment policies Aa Aa On the surface, it seems that a firm would want to hold high levels of current assets to ensure its liquidity and its ability to meet all of its short-term obligations. However, current assets are not very productive and generate very low returns when held. Therefore, a firm must strike a balance and hold those types and quantity of current assets that work best for it. In the following table, identify which current asset investment policy is most likely to work best for each firm. Current Asset Investment Policy Moderate Relaxed Restricted Newtown Propane is a mature firm that has reliable funding sources and strong, stable cash flows. It places a higher value on avoiding current asset shortages than it does on minimizing the cost of holding current assets. St. McStanky Beer Co. tries to hold optimal levels of current assets (including cash, marketable securities, accounts receivable, and inventory), such that it balances the potential costs of running through its assets with the cost of holding balances in those assets. Tolbotics Inc. is a relatively young technology firm that is slightly past the startup stage but still faces significant capital constraints that do not allow any overinvestment in current assets. Consequently, the firm must be careful about how it invests its funds. Flash Playor WIN 30,0,0,134