Permanent working capital requirements can be financed using commercial paper.

Question

Quizplus · Accepted Answer

Permanent working capital requirements refer to the long-term financing needs of a company, such as investments in fixed assets or inventory. Commercial paper, on the other hand, is a short-term debt instrument used for short-term financing needs. Therefore, permanent working capital requirements cannot be financed using commercial paper as it is not a suitable source of long-term financing.

Permanent Working Capital Requirements Can Be Financed Using Commercial Paper