Which of the following is an advantage of the use of current liabilities to finance assets?
A)less risk of illiquidity
B)more flexibility
C)lower interest costs
D)Both B and C

Question

Quizplus · Accepted Answer

Using current liabilities to finance assets offers more flexibility as these liabilities have short-term maturity and can be easily repaid without incurring any prepayment penalty. Additionally, the cost of borrowing through current liabilities is generally lower as compared to long-term liabilities like bonds, which translates onto lower interest costs.

Which of the Following Is an Advantage of the Use