When a Firm Finances Long-Term Assets with Short-Term Sources of Funding

question 79

Multiple Choice

When a firm finances long-term assets with short-term sources of funding, it:

• A)Reduces the risk of cash shortage
• B)Will have lower interest expense
• C)Improves the leverage ratio
• D)Is ignoring the principle of matched maturities

Recognize the significance of Regional Trade Agreements (RTAs) and examples like the European Union (EU).

Understand the impact of reduced order cycle times on supply chain management.

Understand the balance between security and efficient global commerce flow.

Understand the membership and basic principles of NAFTA.

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Definitions:

Test Statistic

A calculated value used to make a decision regarding a hypothesis test; it measures the degree of agreement between a sample data and the null hypothesis.

Sample Proportion

The ratio of members in a statistical sample that have a particular attribute to the total number of members in the sample.

Null Hypothesis

The null hypothesis is a statement used in statistics that proposes there is no significant difference or effect, serving as the starting point for hypothesis testing.

Alternative Hypothesis

A statistical hypothesis that proposes a difference or effect, contrasting the null hypothesis.