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The chosen answers may not be correct. Please share your knowledge Which two of the following five statements are correct? Select two alternatives: Firms should
The chosen answers may not be correct. Please share your knowledge
Which two of the following five statements are correct? Select two alternatives: Firms should monitor accounts payable to make sure that they are making the payments at earliest possible time. Short-term financial planning is based on forecasts of future cash flows to see whether any shortage or surplus of cash flow can be expected in the long-term. The matching principle states that short-term needs should be financed with short- term debt and long-term needs should be financed with long-term sources of funds. Because temporary working capital represents a short-term need, the firm should finance this portion of its investment with short-term financing. The matching principle specifies that short-term liabilities should be financed with long-term sources of funds, otherwise the firm is likely to run into liquidity problemsStep by Step Solution
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