Long-Term Loans Are Often More Expensive Than Short-Term Loans

question 149

True/False

Long-term loans are often more expensive than short-term loans.

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Definitions:

Net Income

The remaining earnings of a company following the deduction of all expenses and taxes from its total revenue.

Cash Dividends

Payments made by a company to its shareholders from its profits or reserves, representing a share of the corporate earnings.

Financing Activities

Transactions and events that affect long-term liabilities and equity of a company, including issuing debt, repaying loans, and distributing dividends.

Fiscal Year

A one-year period used by governments and businesses for accounting and financial reporting, which may or may not align with the calendar year.