Although short-term interest rates have historically averaged less than long-term rates, the heavy use of short-term debt is considered to be an aggressive current operating asset financing strategy because of the inherent risks of using short-term financing.
Answer the following statement true (T) or false (F)
True
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Long-term investments are usually held as an investment of cash for use in current operations.
Answer the following statement true (T) or false (F)
Phil agrees to work for Vacation Resorts, Inc., as a chef. In determining whether a contract has been formed, an element of prime importance is
A. the parties' intent. B. Phil's rate of pay. C. the duration of the work. D. Vacation Resorts's facilities.
The principle of insurable interest is important because it:
A) makes insurance companies more profitable B) supports the principle of indemnity C) prevents insurers from unfairly denying insurance claims D) prevents an insurer from subrogating against a negligent third party
In general, the greater a firm's reliance upon short-term debt or current liabilities, the lower the
A) liquidity. B) flexibility. C) certainty of interest costs. D) both A and C.