Which of the following statements is not true?
A) A flexible policy toward total asset requirement involves cash surplus.
B) A flexible policy toward total asset requirement involves a permanent need for short-term borrowing.
C) A restrictive policy toward total asset requirement involves a large investment in net working capital.
D) Maturity hedging seeks to avoid financing long-term assets with short-term borrowing.
E) Usually, long-term borrowing costs are lower than short-term borrowing costs.

Question

Quizplus · Accepted Answer

Long-term borrowing costs are usually higher than short-term borrowing costs due to the increased risk and time value of money over a longer period.

Which of the Following Statements Is Not True