Long-term debt carries additional risk because interest and principal payments are not discretionary.

Name: Long-term debt carries additional risk because interest and principal payments are not discretionary.
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Question

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Long-term debt has a fixed interest and principal payment schedule, which must be met regardless of the company's financial performance. This can put added strain on a company's cash flow and overall financial health, making long-term debt riskier than other forms of financing.

Long-Term Debt Carries Additional Risk Because Interest and Principal Payments