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Question
Of the total ________ term finance, the proportions to be raised by way of debt and/or equity is also a financial management decision.
Of the total ________ term finance, the proportions to be raised by way of debt and/or equity is also a financial management decision.
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Solution
The correct option is A long
Financial management, among others, involves decision about the proportion of long-term and short term funds. An organisation wanting to have more liquid assets would raise relatively more amount on a long-term basis. There is a choice between liquidity and profitability. The underlying assumption here is that current liabilities cost less than long term liabilities.
Financial management, among others, involves decision about the proportion of long-term and short term funds. An organisation wanting to have more liquid assets would raise relatively more amount on a long-term basis. There is a choice between liquidity and profitability. The underlying assumption here is that current liabilities cost less than long term liabilities.
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