Because the Use of Short-Term Debt to Finance Fixed Assets

question 82

True/False

Because the use of short-term debt to finance fixed assets is a working capital decision variable in the current period,it does not need to be taken into account when managers assess the firm's ability to meet its current obligations using expected cash inflows.

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Definitions:

Decentralized Purchasing Structure

An organizational framework where purchasing decisions are made independently across different departments or locations, rather than being centralized.

Centralization

The organizational structure decision to concentrate decision-making authority and control at higher levels of management.

Supply Policies

Guidelines and rules set by an organization to govern its procurement activities and relationships with suppliers.

Purchasing Consortia

Groups of businesses that come together to aggregate their purchasing volume in order to negotiate better prices and terms from suppliers.