According to the Matching Principle, Short-Term Needs for Funds Should

question 29

True/False

According to the matching principle, short-term needs for funds should be financed by short-term sources of funds; long-term need for funds should be financed by long-term sources of funds.

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Definitions:

Inputs

Resources used in the production process, including labor, capital, materials, and energy, to create output or goods and services.

Output

The amount of goods or services produced by a business, sector, or economy over a specific period.

Explicit Costs

Direct, out-of-pocket payments for costs of production, such as wages, rent, and materials.

Entrepreneur's Potential Earnings

The forecasted income an entrepreneur can expect from their business venture, taking into account risks and opportunities.