Question $(8)$

Under what circumstances would it be appropriate to use long$-$term debt to fund current assets?

When current assets comprise high value items that can be used as security against the loan.

When there is certain permanent amount of current assets with little seasonality that require financing.

When the business has little use for fixed assets, allowing them to use long$-$term debt that is not required to finance fixed assets.

When there are large seasonal swings in demand and management need to be sure that funding will be available.