An advantage of short-term over long-term borrowing is:

Question

Quizplus · Accepted Answer

Short-term borrowing provides more flexibility than long-term borrowing because the borrower is not locked into a long-term commitment, and can quickly take advantage of favorable market conditions or adjust to changing financial needs. While short-term borrowing generally comes with higher interest rates than long-term borrowing, it is still a cost-effective option for managing cash flow and meeting short-term financial goals. However, there is always a need to repay the loan, so option A is incorrect. Option C is also incorrect, since short-term borrowing typically has higher costs than long-term borrowing.

An Advantage of Short-Term Over Long-Term Borrowing Is