The Risk to the Firm of Borrowing Using Short-Term Credit

question 16

True/False

The risk to the firm of borrowing using short-term credit is usually greater than if it used long-term debt.Added risk stems from greater variability of interest costs on short-term debt.Even if its long-term prospects are good,the firm's lender may not renew a short-term loan if the firm is even temporarily unable to repay it.

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Definitions:

Chunking

A method of organizing or combining small pieces of information into larger, more manageable units to enhance memory and learning.

Elaborative Rehearsal

A memory technique that involves thinking about the meaning of the term to be remembered, as opposed to simply repeating the word to oneself.

Episodic Memories

Memories of specific events or experiences, including the contexts in which they occurred, that can be explicitly stated or conjured.

Retrograde Amnesia

A form of amnesia where individuals are unable to recall events that occurred before the onset of the amnesia.