It Is Easier to Cover Monthly Loan Payments If You

question 85

Multiple Choice

It is easier to cover monthly loan payments if you select financing with

• A)a relatively long maturity.
• B)a relatively short maturity.
• C)a relatively high interest rate.
• D)a relatively large amount of loans.

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Definitions:

COGS

Stands for Cost of Goods Sold and refers to the direct costs attributable to the production of the goods sold by a company.

Payables Turnover Rate

A liquidity metric that measures how quickly a company pays off its suppliers by dividing total purchases by average accounts payable.

Accounts Payable Balance

The amount of money a company owes to its suppliers or creditors for goods and services purchased on credit.

Sales

The exchange of goods or services for money, representing the primary revenue source for most businesses.