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The matching principle suggests that
1. equipment should be financed with long-term sources
2. current assets may be financed with short-term
sources
3. plant should not be financed with short-term
sources
A. 1, 2, and 3
B. 1 and 3
C. 2 and 3
D. 1 and 2

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Jamar Ferry
Jamar FerryLv2
30 Sep 2019

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True or false:

1.A capital lease incurs tax deductible interest expense. An operating lease is not tax deductible.
2. The only form of financing considered 'free' are the accounts payable and accrued expenses balances.
3. The 'optimal' capital structure is the one under which the firm has roughly equal dollar amounts of equity financing and long-term debt financing.
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