Which of the Following Statements Is CORRECT

question 70

Multiple Choice

Which of the following statements is CORRECT?

• A) Trade credit is provided only to relatively large,strong firms.
• B) Commercial paper is a form of short-term financing that is primarily used by large,strong,financially stable companies.
• C) Short-term debt is favored by firms because,while it is generally more expensive than long-term debt,it exposes the borrowing firm to less risk than long-term debt.
• D) Commercial paper can be issued by virtually any firm so long as it is willing to pay the going interest rate.
• E) Commercial paper is typically offered at a long-term maturity of at least five years.

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Definitions:

Profit Maximization

Refers to the process or strategy focused on increasing the net profit of a business by either increasing revenue, reducing costs, or both.

Transportation Strategy

The planning and implementation of effective means to move goods and services from one location to another, aiming to optimize costs, efficiency, and reliability.

Competitive Strategy

A long-term plan of action designed to achieve a sustainable advantage over competitors.

Cross Dock Distribution Center

A facility specifically designed for cross-docking processes, facilitating the swift transfer of goods from incoming to outgoing transportation without long-term storage.