Since permanent working capital is invested in short-term assets,it should be financed with short-term sources of funds.

Question

Quizplus · Accepted Answer

Although permanent working capital is invested in short-term assets, it is a recurring and ongoing need for the business and therefore should be financed with long-term sources of funds. Short-term sources of funds should be used to finance temporary or fluctuating working capital needs.

Since Permanent Working Capital Is Invested in Short-Term Assets,it Should