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Why is it important to distinguish between long-term or ond long-term funds in business.

Why is it important to distinguish between long-term or ond long-term funds in business.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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10. Briefly answer the following questions 1. Why is it important to distinguish between long-term or short-term financing?' 2. Discuss when to use short-term and long-term funds in business.
Transcribed Image Text:10. Briefly answer the following questions 1. Why is it important to distinguish between long-term or short-term financing?' 2. Discuss when to use short-term and long-term funds in business.
funds to utilize. The targel cost of capital. Let's PRACTICE! Read the following scenarios and identify the type of financing it needs. Write SF-if it is a short-term financing and LF if long term Financing. 1. Acquisition of equipment 2. Franchise of a fast-food outlet 3. Purchase of inventory for a clothing shop 4. Loan for agricultural needs (L.e. palay production) 5. Loan for purchase of a commercial space 6. Development of a subdivision 7. Auto-loan 8. Loan for sari-sari store supplies 9. Housing Loan 10. Emergency loans (advances) eions
Transcribed Image Text:funds to utilize. The targel cost of capital. Let's PRACTICE! Read the following scenarios and identify the type of financing it needs. Write SF-if it is a short-term financing and LF if long term Financing. 1. Acquisition of equipment 2. Franchise of a fast-food outlet 3. Purchase of inventory for a clothing shop 4. Loan for agricultural needs (L.e. palay production) 5. Loan for purchase of a commercial space 6. Development of a subdivision 7. Auto-loan 8. Loan for sari-sari store supplies 9. Housing Loan 10. Emergency loans (advances) eions
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