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

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Long-Term and Short-Term Financing1Long-Term and Short-Term FinancingMelissa KrolFIN 200October 4, 2010Instructor:John G. OladokunAxia College of University of Phoenix
Long-Term and Short-Term Financing2Long-Term and Short-Term FinancingLong-term debt financing customarily pertains to assets businesses purchase, such asequipment, buildings, land, and machinery.It is correct in assuming that long-term debtfinancing means for longer than one year.Normally businesses using long-term debt to financethe purchase of an asset plan for repayment of the loan and expect the useful life of the asset toextend for a period of time longer than one year.Short-term debt financing generally pertains to funds needed for the everyday operations ofthe business, such as purchasing inventory, supplies, and paying wages.Short-term financingmeans 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.

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Term
Spring
Professor
SMITH
Tags
Finance, short term financing, short term financing long term

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