Which of the Following Is the Most Conservative Mix of Long-Term

question 38

Short Answer

Which of the following is the most conservative mix of long-term funding?
25% debt, 75% equity
75% debt, 25% equity
100% equity
100% debt
50% debt, 50% equity

---

Definitions:

Cash Flows

The net amount of cash being transferred into and out of a business.

General Journal

The primary accounting record used for recording all day-to-day financial transactions of a company.

General Ledger

The master set of accounts that summarize all transactions occurring within an entity, serving as the main source for financial reporting.

Normal Balance

The side (debit or credit) of an account that is expected to have a higher balance, according to the rules of double-entry accounting.