Week 5 Checkpoint-Long-Term and Short-Term Financing

Week 5 Checkpoint-Long-Term and Short-Term Financing -...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Long-Term and Short-Term Financing 1 Long-Term and Short-Term Financing Melissa Krol FIN 200 October 4, 2010 Instructor: John G. Oladokun Axia College of University of Phoenix
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Long-Term and Short-Term Financing 2 Long-Term and Short-Term Financing Long-term debt financing customarily pertains to assets businesses purchase, such as equipment, buildings, land, and machinery. It is correct in assuming that long-term debt financing means for longer than one year. Normally businesses using long-term debt to finance the purchase of an asset plan for repayment of the loan and expect the useful life of the asset to extend for a period of time longer than one year. Short-term debt financing generally pertains to funds needed for the everyday operations of the business, such as purchasing inventory, supplies, and paying wages. Short-term financing means any funds borrowed will be repaid in a time period less than a year. An example of short- term financing is a credit card or line of credit. Based on term structure of interest rates long-term financing is normally more expensive
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 3

Week 5 Checkpoint-Long-Term and Short-Term Financing -...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online