Question

Which of the following statements relating to working capital financing is not correct? A. A conservative policy uses long-term debt to finance non-current assets. B. Short-term debt is cheaper than long-term debt. C. An aggressive policy uses long-term debt to finance fluctuating current assets. D. Long-term debt is less risky that short-term debt.

Name: which of the following statements relating to working capital financing is not correct a a conservative policy uses long term debt to finance non current assets b short term debt is cheaper 41511
Uploaded: 2023-06-22T21:43:57-08:00
Duration: 3 min 19 s
Channel: Madhur L
Description: which of the following statements relating to working capital financing is not correct a a conservative policy uses long term debt to finance non current assets b short term debt is cheaper 41511

          Which of the following statements relating to working capital financing is not correct?
A.
A conservative policy uses long-term debt to finance non-current assets.
B.
Short-term debt is cheaper than long-term debt.
C.
An aggressive policy uses long-term debt to finance fluctuating current assets.
D.
 Long-term debt is less risky that short-term debt.

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Horngren’s Cost Accounting

Srikant M. Datar, Madhav V. Rajan 16th Edition

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Solved by Expert Madhur L

06/22/2023

Step 1

- This statement is correct. A conservative policy involves using long-term debt to finance long-term assets, which are also known as non-current assets. B: Short-term debt is cheaper than long-term debt. - This statement is generally correct. Short-term debt Show more…

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Which of the following statements relating to working capital financing is not correct? A. A conservative policy uses long-term debt to finance non-current assets. B. Short-term debt is cheaper than long-term debt. C. An aggressive policy uses long-term debt to finance fluctuating current assets. D. Long-term debt is less risky that short-term debt.