Which of the following need to be excluded from the calculation of a firm's amount of permanent debt?
A) Long-term debt
B) Revolving lines of credit
C) Mortgage debt
D) None of the above

Question

Quizplus · Accepted Answer

Revolving lines of credit are not considered as permanent debt as they can be withdrawn and repaid as per the requirement of the firm. On the other hand, long-term debt and mortgage debt are typically considered as permanent debt as they are not intended to be repaid within a short period. Hence, revolving lines of credit should be excluded from the calculation of a firm's amount of permanent debt.

Which of the Following Need to Be Excluded from the Calculation