Which of the Following Statements Regarding How a Firm Should

question 5

Multiple Choice

Which of the following statements regarding how a firm should finance its cash needs is TRUE?

• A)Permanent working capital should be financed by long-term sources of funds,while temporary working capital should be financed by short-term sources of funds.
• B)Permanent working capital should be financed by short-term sources of funds,while temporary working capital should be financed by long-term sources of funds.
• C)Both permanent working capital and temporary working capital should be financed by short-term sources of funds.
• D)Both permanent working capital and temporary working capital should be financed by long-term sources of funds.
• E)Permanent working capital should be financed by long-term sources of funds,while temporary working capital should only be paid for with cash.

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Definitions:

Extreme Forms

Refers to the most severe or intense version of a condition, phenomenon, or behavior.

Ventral Tegmental Area

A region of the brain involved in the reward circuitry and associated with dopamine production.

Avoidant Attachment

Feeling discomfort in being close to other people, and distrustful and fearful of being dependent.