Why Would a Firm Ever Use Short-Term Debt to Finance

question 63

Multiple Choice

Why would a firm ever use short-term debt to finance permanent current assets?

• A)This would be illogical and is rarely observed.
• B)This would occur if short-term rates were much lower than long-term rates.
• C)This would only occur if the managers were very conservative.
• D)None of these.

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Definitions:

Job Enrichment

The process of enhancing a job by adding tasks that increase responsibility, autonomy, and opportunities to grow.

Relational Architecture

The design and structure of relationships within organizations, including hierarchies and networks, that influence how information flows and how people interact.

Connect With People

The process of establishing meaningful relationships with others through communication, empathy, and interpersonal skills.

More Responsibility

Refers to the additional duties or tasks assigned to an individual, often indicating trust and confidence in their capabilities.