Asked by Jessie Kindley on May 16, 2024
Verified
A firm is preparing a short-term financial plan. One question the firm would most likely NOT address is ______________________.
A) How much cash should be kept on hand.
B) How much short-term borrowing should be employed.
C) What is the optimal level of long-term unsecured credit.
D) How long should credit be extended to customers.
E) Should the firm issue commercial paper.
Long-term Unsecured Credit
A type of loan given based on the borrower's creditworthiness without the need for collateral, typically with a repayment period beyond one year.
Commercial Paper
A short-term, unsecured debt instrument issued by companies to finance their immediate operational needs.
Short-term Borrowing
Loans or debt obligations that are expected to be paid back within a short period, typically less than one year, often used for operational expenses.
- Understand the key elements and importance of short-term financial planning in business operations.
Verified Answer
CS
Chancey SlusherMay 21, 2024
Final Answer :
C
Explanation :
The question about the optimal level of long-term unsecured credit is not typically addressed in a short-term financial plan, as it pertains to long-term financing decisions. Short-term financial planning focuses on immediate financial needs and obligations.
Learning Objectives
- Understand the key elements and importance of short-term financial planning in business operations.