Which of the Following Is More Likely for a Firm

question 83

Multiple Choice

Which of the following is more likely for a firm practicing the "relaxed" strategy of long- versus short-term borrowing at the height of sales demand?

• A)it will borrow heavily on a short-term basis
• B)it will invest heavily in marketable securities
• C)it will borrow heavily on a long-term basis
• D)long-term financing will approximate capital requirements

---

Definitions:

Assets

Assets are resources owned by a business or individual, which provide economic value or are expected to generate future benefit.

Revenues

The income generated from normal business operations and includes discounts and deductions for returned merchandise.

Limited Liability

A legal structure that limits the financial liability of owners or shareholders of a business to the amount they've invested, protecting personal assets from business debts.

Corporation

A legal entity that is separate and distinct from its owners, who are shareholders, and offers limited liability protection to them.