What Motivation Is Provided for Managers Not to Follow the Relaxed

question 39

Multiple Choice

What motivation is provided for managers not to follow the relaxed strategy of long- versus short-term financing?

• A) Transaction costs are required to continually obtain financing.
• B) Short-term investment income is often unattractive.
• C) Investment opportunities must frequently be ignored.
• D) Long-term financing has burdensome tax consequences.

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Definitions:

Mislaid Property

Items that are intentionally placed somewhere by the owner and then forgotten, differentiating it from lost or abandoned property.

Real Property

Land and anything permanently attached to it, such as buildings and fixtures, which is considered immovable.

Conditional Contract

A contract that becomes enforceable only on the happening or termination of a specified condition.

Abandoned Property

Property that has been discarded by the owner, who has relinquished all rights, claims, and interests in it without the intention of reclaiming it.