cafe time inc have asked you for a $1$ year loan to finance Question $(7)$

Caf$-$time Inc. have asked you for a $1-$yearloan to finance the purchase of $10-$year leases on a number of new coffee shops. What would be your advice?

A short$-$term loan is a poor choice since interest rates are usually much higher on short$-$term loans.

A longer$-$term loan would be a poor choice since it would lock Caf$-$time into making extended

repayments.

A short$-$term loan is a good choice because it offers Caf$-$time significant flexibility.

A longer$-$term loan would be a better choice since it can be repaid from the operating profits

generated by the stores.