Which of the following are the three reasons that firms need short-term financing?
A) seasonalities, permanent working capital, and positive cash flow shocks
B) seasonalities, funding risk, and permanent working capital
C) negative cash flow shocks, positive cash flow shocks, and seasonalities
D) permanent working capital, negative cash flow shocks, and funding risk

Question

Quizplus · Accepted Answer

C) Negative cash flow shocks, positive cash flow shocks, and seasonalities are three reasons firms need short-term financing. Negative cash flow shocks require firms to find immediate funding to cover unexpected expenses, positive cash flow shocks might necessitate short-term financing to take advantage of sudden opportunities, and seasonalities in business operations often lead to periods where short-term financing is needed to bridge gaps in cash flow.

Which of the Following Are the Three Reasons That Firms