The owner of a Mountain Cycle Shop worries that cash flows may be insufficient to pay his current operating expenses.While he anticipates a surplus of cash inflows as warm weather approaches,he needs to borrow funds now to meet his immediate obligations.He can best resolve his cash flow concerns by obtaining ________ financing.
A)intermediate
B)contingency
C)short-term
D)long-term

Question

Quizplus · Accepted Answer

In this scenario, the owner needs to borrow funds to meet immediate obligations, which implies a need for short-term financing. Intermediate financing is typically used for financing larger projects or investments, while contingency financing is for unexpected emergencies. Long-term financing is used for investments lasting multiple years. Therefore, the best choice in this case is short-term financing (option C).

The Owner of a Mountain Cycle Shop Worries That Cash