Question

Question 28 Long-term financing may be riskier than short-term financing during periods of tight credit because the firm may not be able to rollover (renew) its debt. True False

Question 25

When deciding whether or not to take a trade discount, the cost of borrowing funds should be compared to the effective annual rate (EAR) of trade credit to determine if the cash discount should be taken.

True

False

Question 26

Depreciation is a non-cash charge, it doesn’t affect the results of cash budget analysis.

True

False

Answer 1

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Answer:

28)

False

Short-term financing may be riskier than long-term financing since, during periods of tight credit, the firm may not be able to rollover (renew) its debt.

29)

True

When deciding whether or not to take a trade discount, the cost of borrowing funds should be compared to the effective annual rate (EAR) of trade credit to determine if the cash discount should be taken.

30)

Depreciation is a non-cash charge, it doesn’t affect the results of cash budget analysis and will be added baack

Hence True