The maturity matching or "self-liquidating" approach involves the financing of permanent net operating working capital with combinations of long-term capital and short-term capital depending on the level of interest rates. When short-term rates are high, short-term assets will be financed with long-term debt to reduce cost and risk.

Question

Quizplus · Accepted Answer

The maturity matching approach involves financing short-term assets with short-term liabilities and long-term assets with long-term liabilities, not using long-term debt to finance short-term assets when short-term rates are high.

The Maturity Matching or "Self-Liquidating" Approach Involves the Financing of Permanent