Which of the following is a disadvantage of long-term loans?
A) They cannot provide substantial sums of money to businesses.
B) They require diluting ownership in organizations.
C) They are available to firms with a weak credit rating.
D) Such loans can restrict the way an organization uses its assets.
E) Not all companies can qualify for loans and acceptable terms.

Question

Quizplus · Accepted Answer

A)Not all companies can qualify for long-term loans and acceptable terms. Payments tie up part of cash flow for the duration of the loan. Purchases made via loans require substantial down payments.
B)Not all companies can qualify for long-term loans and acceptable terms. Payments tie up part of cash flow for the duration of the loan. Purchases made via loans require substantial down payments.
C)Not all companies can qualify for long-term loans and acceptable terms. Payments tie up part of cash flow for the duration of the loan. Purchases made via loans require substantial down payments.
D)Not all companies can qualify for long-term loans and acceptable terms. Payments tie up part of cash flow for the duration of the loan. Purchases made via loans require substantial down payments.
E)Not all companies can qualify for long-term loans and acceptable terms. Payments tie up part of cash flow for the duration of the loan. Purchases made via loans require substantial down payments.

Which of the Following Is a Disadvantage of Long-Term Loans