Answer (C) greater the risk that it will be unable to meet principal and interest payments is correct. A rise within the proportion of short funding won't have an effect on a company’s degree of leverage, however risk is exaggerated due to the requirement for frequent refinancing. as a result of the someone company are going to be forced to fulfill principal and interest payments quickly, maybe before expected funds from a replacement project, the danger of default is exaggerated. Also, future interest rates square measure tough to predict.

Answer (B) is wrong as a result of Leverage is that the use of borrowed funds to earn returns for stockholders. it's immaterial whether or not the borrowed funds square measure long- or short.

Answer (D) is wrong as a result of The length of a loan doesn't have an effect on the number of quick assets. each long- and short loans lead to quick assets.

Answer (A) is wrong as a result of a rise in current liabilities decreases the current ratio.

Answer (C) greater the risk that it will be unable to meet principal and interest payments is correct. A rise within the proportion of short funding won't have an effect on a company’s degree of leverage, however risk is exaggerated due to the requirement for frequent refinancing. as a result of the someone company are going to be forced to fulfill principal and interest payments quickly, maybe before expected funds from a replacement project, the danger of default is exaggerated. Also, future interest rates square measure tough to predict.

Answer (B) is wrong as a result of Leverage is that the use of borrowed funds to earn returns for stockholders. it's immaterial whether or not the borrowed funds square measure long- or short.

Answer (D) is wrong as a result of The length of a loan doesn't have an effect on the number of quick assets. each long- and short loans lead to quick assets.

Answer (A) is wrong as a result of a rise in current liabilities decreases the current ratio.