Which ONE of the Following Statements About Matching Maturity Strategy

question 48

Multiple Choice

Which ONE of the following statements about matching maturity strategy is true?

• A) All working capital is funded with short-term borrowing.
• B) As the level of sales varies seasonally, short-term borrowing fluctuates between some minimum and maximum level.
• C) All fixed assets are funded with long-term financing.
• D) All of the above.

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Definitions:

Direct Labor

The labor costs directly associated with the production of goods or services, typically involving manufacturing or construction work.

Selling and Administrative Expenses

Costs associated with the selling of products and the management of the business.

Fixed Overhead

The total non-variable costs associated with operating a business, including rent, salaries, and insurance, that remain unchanged regardless of the level of production or sales.

Direct Labor

The wages and other forms of remuneration paid to employees who directly work on the products being manufactured, such as assembly line workers.