If the total long term ﬁnancing of the ﬁrm is greater than the total ﬁnancing needs for part of the year and less than the needs for some of the year due to seasonal ﬂuctuations the company will
Most likely:

Question

Quizplus · Accepted Answer

If a company's long-term financing exceeds its financing needs for part of the year but falls short during seasonal fluctuations, the best option is to invest in marketable securities and borrow short-term funds. By investing excess funds in marketable securities, the company can earn interest income and improve its liquidity position. Borrowing short-term funds when needed will help the company bridge any financing gaps during periods of high demand. Holding excess cash or reducing business activities are not very effective as holding excess cash would result in lower returns and reducing business activities may harm the company's long-term growth prospects.

If the Total Long Term ﬁNancing of the ﬁRm Is