Asked by Alyssa Sweeting on May 02, 2024
Verified
Which of the following issues is/are NOT considered a part of short-term finance?
A) How much credit should be extended to customers?
B) How much should the firm borrow short-term?
C) What is a reasonable level of cash for the firm to maintain?
D) How much of the firm's current income should be paid out as dividends?
E) Should the firm issue commercial paper or obtain a bank loan?
Current Income
This refers to the total amount of income generated from various sources, including wages, investments, and other types of income over a current period of time.
Short-term Finance
Financing obtained for a time period of less than one year, often used to address immediate operational needs.
Commercial Paper
An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable and inventories.
- Comprehend the crucial components and significance of short-term financial planning in managing business activities.
Verified Answer
ZK
Zybrea KnightMay 03, 2024
Final Answer :
D
Explanation :
Dividend policy decisions, such as how much of the firm's current income should be paid out as dividends, are typically considered part of long-term financial planning rather than short-term finance. Short-term finance usually deals with managing the day-to-day financial activities of a firm, such as managing cash flow, short-term borrowing, and managing receivables and payables.
Learning Objectives
- Comprehend the crucial components and significance of short-term financial planning in managing business activities.