Financing is perfectly matched with appropriate assets

Assignment Help Financial Management

Reference no: EM132063200

1. If a company wished to structure its financing so it repaid funds borrowed only when a project had positive cash flows, it would choose a/an:

1) fully drawn advance

2) term loan

3) interest-only loan

4) deferred payment loan

2. Goniff Steel has $24,000 in assets, consisting of $1,000,000 of temporary current assets, $2,000,000 of permanent current assets, and $1,200,000 of fixed assets. Short-term interest rates are 8% and long-term interest rates are 12%. If long-term financing is perfectly matched with the appropriate assets and the same is true of short-term financing, what is the firm's interest payment?

A. $376,000 B. $456,000 C. $464,000 D. $489,000

Reference no: EM132063200

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