Asked by
semaj Lawshea
on Dec 01, 2024Verified
Why might a portion of working capital be funded with long-term debt?
A) Because it is considered temporary working capital.
B) Because working capital encompasses some fixed assets which tend to be long-term investments.
C) Because of beneficial tax breaks on the interest paid on long-term debt.
D) Because it is considered permanent working capital.
Permanent Working Capital
The minimum amount of working capital that a company needs to operate continuously.
Long-Term Debt
Borrowings by a company that are due for repayment after one year or more.
Tax Breaks
A reduction in the amount of taxes that an individual or company owes to the government, often used to incentivize certain behaviors or investments.
- Investigate the parts and significance of working capital in financial procedures.
Verified Answer
JS
Learning Objectives
- Investigate the parts and significance of working capital in financial procedures.