Which of the Following Is Most Consistent with the Self-Liquidating

question 6

Multiple Choice

Which of the following is most consistent with the self-liquidating debt principle in working capital management?

• A)Fixed assets should be financed with short-term notes payable.
• B)Inventory should be financed with preferred stock.
• C)Accounts receivable should be financed with short-term lines of credit.
• D)Borrow on a floating rate basis to finance investments in permanent assets.

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Definitions:

Affective States

Emotional conditions or feelings that can affect perceptions, judgments, and behaviors.

Arousal

A state of heightened physiological and psychological activity or awareness, often induced by stimuli or situations.

Guilt

A psychological state that arises from the realization of causing harm or failing to meet moral standards.

Malnourished Children

Young individuals who suffer from poor nutritional status due to inadequate or unbalanced intake of nutrients, leading to health problems and developmental delays.