Why might a portion of working capital be funded with long-term debt?
A)Because it is considered temporary working capital.
B)Because working capital encompasses some fixed assets which tend to be long-term investments.
C)Because of beneficial tax breaks on the interest paid on long-term debt.
D)Because it is considered permanent working capital.

Question

Quizplus · Accepted Answer

Permanent working capital refers to the minimum amount of resources that a company needs to continue its operations indefinitely. Funding this portion with long-term debt can provide stability and potentially lower costs compared to short-term financing options.

Why Might a Portion of Working Capital Be Funded with Long-Term