Which of the following statements concerning liquidity and debt is true?
A) Long-term debt is generally less costly than short-term debt.
B) The risk of illiquidity does not depend on the mix of short-term versus long-term debt.
C) A firm can reduce its risk for illiquidity by shifting from short-term debt to long-term debt.
D) The greater the use of short-term debt, the lower the risk of illiquidity.
C
You might also like to view...
The report on internal control required by the Sarbanes-Oxley Act of 2002 may be prepared by either management or the company's auditors
a. True b. False Indicate whether the statement is true or false
The choice of an inventory valuation method has little to no impact on gross profit and cost of sales.
Answer the following statement true (T) or false (F)
The Robinson-Patman Act was the first antitrust law enacted in the United States
Indicate whether the statement is true or false
Zelda is a recent fashion graduate. She started her own apparel store with an investment of $300,000. In the first year she made a profit of $60,000. If she had taken up a job as a fashion editor for a magazine, she would have earned $50,000 as salary per year. Also, she could have invested her capital, $300,000, in treasury bonds and earned an interest of $12,000. Thus, the amount $62,000 ($50,000 + $12,000) would be Genevieve's
A. break-even price. B. reservation price. C. opportunity cost. D. social cost.