MCB Company experienced a significant increase in sales as a result of its new promotional campaign. Yesterday, however, it realized that because most of those sales were on credit, it did not have enough money in the bank to pay this month's bills. MCB can take care of this situation temporarily by doing which of the following?
A) obtaining long-term financing
B) selling commercial drafts
C) issuing shares
D) obtaining short-term financing

Question

Quizplus · Accepted Answer

MCB Company needs a short-term solution to its cash flow problem, as it needs the money to pay its bills this month. Obtaining long-term financing or issuing shares are more long-term solutions that would not address the immediate need for cash. Selling commercial drafts may be an option, but it may not generate enough money quickly. Therefore, obtaining short-term financing, such as a line of credit or a short-term loan, is the best choice to address the immediate need for cash.

MCB Company Experienced a Significant Increase in Sales as a Result