Excessive short-term ﬁnancing is a primary reason why ﬁrms have cash surpluses.

Name: Excessive short-term ﬁnancing is a primary reason why ﬁrms have cash surpluses.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Excessive short-term financing refers to borrowing short-term funds to finance long-term investments or assets. This leads to a cash deficit in the long run and not a cash surplus. Firms may have cash surpluses due to efficient cash management, profitable operations, or conservative financial policies.

Excessive Short-Term ﬁNancing Is a Primary Reason Why ﬁRms Have