As a result of cash flow shortages, Millard's Department Stores has fallen behind in payments to suppliers. Some suppliers are withholding shipments to Millard's until they receive payments on overdue accounts. To meet their immediate needs, Millard's Department Stores should utilize:
A) vulture capital.
B) long-term financing.
C) contingency capital.
D) short-term financing.

Question

Quizplus · Accepted Answer

Short-term financing would be the best choice for Millard's Department Stores to meet their immediate needs as it provides quick access to cash that can be used to pay off overdue accounts and suppliers. This can come in the form of short-term loans, lines of credit, or factoring of accounts receivable. Long-term financing and contingency capital may not be feasible solutions for resolving immediate cash flow shortages. Vulture capital, also known as venture capital, is not appropriate in this situation as it is typically invested in startup companies with high growth potential.

As a Result of Cash Flow Shortages, Millard's Department Stores