Why is the time factor included in the formula

Reference no: EM132091434

Question: 1. What is a line of credit? Does a line of credit affect the amount of cash that a company needs to have available to pay current liabilities?

2. Why is the "time" factor included in the formula to compute interest?

3. If a company has a long-term loan that has only two years remaining until it matures, how is it reported on the balance sheet ( a) this year and ( b) next year?

Reference no: EM132091434

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