Morgan's Transition
Morgan is currently a manager of a small financial planning firm. He is seeking a new career with a large corporation in the banking industry. He recently applied for the financial manager opening at G & T Bank. He is concerned that the transition from his small firm to a large corporation will be difficult. To better prepare himself for this change, he has decided to enroll in a few business classes to strengthen his understanding of corporate finance. The business classes have proven to be a valuable tool for learning the critical skills needed to fully understand a financial plan, equity financing, and debt financing. Morgan now believes he has strengthened his competitive advantage in his quest for the job.
-Refer to Morgan's Transition. When Morgan has to counsel clients on short-term versus long-term financing needs, which of the following should he identify as a short-term financing need?
A) Speculative production
B) Business start-up costs
C) Acquisitions and mergers
D) Replacement of equipment
E) Expansion of facilities

Question

Quizplus · Accepted Answer

Speculative production typically involves short-term financing needs because it deals with the production of goods in anticipation of future demand, which requires capital for a shorter duration compared to long-term investments like business start-ups, acquisitions, mergers, equipment replacement, or facility expansions.

Morgan's Transition Morgan Is Currently a Manager of a Small Financial Planning