As a financial manager, you decide to borrow funds in order to meet payroll. Your company will pay back the funds within nine months. You are seeking ________ financing.
A)long-term
B)short-term
C)retained earnings
D)equity

Question

Quizplus · Accepted Answer

Short-term financing is used to meet immediate funding needs that typically need to be repaid within a year or less. In this case, borrowing funds to meet payroll and planning to pay it back within nine months would fall under short-term financing. Long-term financing is typically used for larger capital investments and is not appropriate for meeting immediate funding needs such as payroll. Retained earnings and equity are both sources of financing, but they do not involve borrowing funds from external sources.

As a Financial Manager, You Decide to Borrow Funds in Order