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:

Optical Storage

A type of data storage that uses optical media, such as CDs and DVDs, to read and write data using lasers.

Flash Drive

A portable storage device that uses flash memory and is commonly used for data storage, backup, and transfer.

Hard Drives

Storage devices used to save and retrieve digital information using one or more rigid rapidly rotating disks coated with magnetic material.

BD

An abbreviation commonly used for Blu-ray Disc, a digital optical disc data storage format.