A popular theory for managing risk to the firm that arises out of its management of working capital (that is, current assets and current liabilities) involves following the principles of self-liquidating debt. How would this principle be applied in each of the following situations? Explain your responses to each alternative.

a. Antara Senior Living owns a chain of senior housing complexes in Purukul around Dehradun area in India.

The firm is presently debating whether it should borrow short or long term to raise INR15 lakhs in needed funds.

The funds are to be used to expand the firm’s senior care facilities, which are expected to last for 25 years.

b. Gujarat Fluorochemicals Limited, headquartered in Surat, India, needs INR7 lakhs to purchase inventory to support its growing sales volume. Gujarat Fluorochemicals does not expect the need for additional inventory to diminish in the future.

c. Laxmi Building Material Suppliers, based in New Delhi, India, is reviewing its plans for the coming year and expected that during the months of November through January, it will need an additional INR8 lakhs to finance the seasonal expansion in inventories and receivables.