Which of the Following Statements Is NOT CORRECT

question 19

Multiple Choice

Which of the following statements is NOT CORRECT?

• A)Commercial paper can be issued by virtually any firm so long as it is willing to pay the going interest rate.
• B)Accruals are "free" in the sense that no explicit interest is paid on these funds.
• C)A conservative approach to working capital management will result in most if not all permanent current operating assets being financed with long-term capital.
• D)The risk to a firm that borrows with short-term credit is usually greater than if it borrowed using long-term debt.This added risk stems from the greater variability of interest costs on short-term debt and possible difficulties with rolling over short-term debt.
• E)Bank loans generally carry a higher interest rate than commercial paper.

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