Commercial paper would be considered appropriate for funding which types of corporate needs?

Question

Quizplus · Accepted Answer

Commercial paper is a short-term debt instrument that is usually issued by companies to meet their short-term financial needs, such as seasonal inventory buildup, accounts receivable financing, or short-term investments in operations. It would not be appropriate for long-term property purchases or the purchase of capital equipment with long lives, such as 5 years or more. Thus, the only appropriate choice in the given options is seasonal needs for a retail firm.

Commercial Paper Would Be Considered Appropriate for Funding Which Types