In General, When Interest Rates Are Expected to Rise, Financial

question 16

Multiple Choice

In general, when interest rates are expected to rise, financial managers

• A) try to lock in long-term financing at low cost.
• B) balance the company's debt structure with more short-term debt and less long-term debt.
• C) accept more risk.
• D) rely more on internal sources of funds rather than external sources.

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Definitions:

GAAP

Generally Accepted Accounting Principles; a collection of commonly-followed accounting rules and standards for financial reporting.

Future Decision Making

The process of considering and evaluating potential actions or policies with their anticipated outcomes in the context of future events.

Operating Cash Flow

The cash generated from a company's normal business operations, indicating the ability to generate adequate cash flow to maintain and expand operations.

Cash Flow From Assets

The total amount of money being transferred into and out of a company's assets, which includes operations, investments, and financing activities.