Chapter 10, Problem 12AA

To determine

To state:The examples of business financing.

Answer to Problem 12AA

Short term financing is taken with a short repayment term whereas intermediate for an average repayment term and long-term financing is taken for a longer repayment term.

Explanation of Solution

Type	Repayment Term	Example
Short term	1-3 months	Payment of bills Buying suppliesEmergencies
Intermediate	1-10 years	Buying land, building, equipment
Long term	10 years or above	Major expansion project like building or new plant

Economics Concept Introduction

Introduction:Financing is the procedure through which the companies are granted money to help them use such money in carrying out their businesses.