Which of the Following Is an Advantage of Utilizing Short-Term

question 154

Multiple Choice

Which of the following is an advantage of utilizing short-term debt to finance the acquisition of short-term assets?

• A) Interest rates on short-term debt are usually lower than interest-rates on long-term debt.
• B) It exposes the firm to less risk than if the firm were to use long-term debt.
• C) It improves the firm's debt ratio.
• D) It increases the firm's sustainable growth rate.

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Definitions:

Business Integration

Describes the process of bringing together various components of a business, such as systems, processes, or departments, to work more efficiently and effectively as a whole.

Geographic Regions

Specific areas defined by natural or artificial boundaries, characterized by distinct physical, social, or cultural attributes.

Departmentation

The process of dividing an organization into distinct departments or units, each managed separately, to streamline operations and improve efficiency.

Sales Department

A division of a business that is responsible for selling the company’s products or services to customers.