Having a Longer-Term Loan

question 111

Multiple Choice

Having a longer-term loan

• A) increases the interest and therefore increases the cost of your loan.
• B) makes your monthly payments larger.
• C) is almost always the best alternative for credit users.
• D) gives you access to additional sources of financing.

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Definitions:

Fixed Assets

Long-term tangible assets that are used in the operations of a business, such as buildings and machinery.

Net Working Capital Turnover

A measure of how effectively a company uses its net working capital to generate sales.

Total Fixed Assets

The combined value of all long-term assets that a company owns, which are not expected to be converted to cash within a year.

Long-Term Liabilities

Long-term liabilities are debts or obligations that are due more than one year in the future, impacting a company's long-term financial sustainability and planning.