Which of the following is false concerning seasonal working capital loans?

Question

Quizplus · Accepted Answer

Seasonal working capital loans are usually short-term in nature and are typically paid back within a year. They are used to finance a company's temporary increase in inventory and accounts receivables during a particular season or period of high sales. They are often collateralized by the inventory and accounts receivables that they are used to finance. While there is no set repayment term for seasonal working capital loans, they are typically shorter than 5 years.

D is also a true statement. A rough estimate of annual working capital needs can be calculated by multiplying the daily cost of goods sold by a firm's cash conversion cycle days.

Which of the Following Is False Concerning Seasonal Working Capital