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

question 120

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) ignores the principle of matched maturities.

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Definitions:

Express Warranty

A guarantee explicitly stated by a seller regarding the condition, functionality, or performance of a product.

Waive Warranty Rights

Choosing to relinquish the legal rights to claim defects or faults in purchased goods or services guaranteed by warranty.

Seller's Request

A demand or requirement put forth by a seller regarding the terms, conditions, or actions related to a sale.

Consumer Protection

Laws and regulations designed to ensure the rights of consumers as well as fair trade, competition, and accurate information in the marketplace.