According to the hedging principle, plant and equipment should be financed with C A

Economics May 08, 2021

According to the hedging principle, plant and equipment should be financed with C A. shortminus-term bank loans. C B. spontaneous financing. C C. commercial paper. C D. longminus-term funds.

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Explanation

Plant and Equipment are the capital assets and required long period of time for bringing in to place as well as have long period of life to extract the economic benefits from the same. So, these should be financed with Long term funds because it carries fixed rate of interest and Higher years to maturity, So, It gives a perfect instrument for hedging.

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