Financing is normally cheaper than long-term financing

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1. Short-term financing is normally cheaper than long-term financing because it:

a. is less risky for the borrower

b. has interest costs which are certain

c. has higher transaction costs

d. usually has lower interest rates than long-term financing

2. For short-term funding (less than a year), firms usually use all but which of the following?

a. bonds

b. trade credit

c. commercial paper

d. revolving line of credit

Reference no: EM131553558

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