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Matching the type of asset and the source of financing is important because it helps to ensure that the financing used to acquire an asset is appropriate and sustainable over the long term.
Different types of assets require different types of financing. For example, short-term assets, such as inventory or accounts receivable, may be better financed with short-term sources of financing, such as a line of credit or trade credit. Long-term assets, such as buildings or equipment, may require long-term financing, such as a mortgage or a term loan.
If the type of asset and the source of financing are not appropriately matched, it can result in financial problems down the road. For example, if a long-term asset is financed with short-term debt, the debt may come due before the asset has generated enough cash flow to pay it off, potentially leading to default and financial distress. On the other hand, if short-term assets are financed with long-term debt, it may result in higher interest costs and a mismatch between the timing of cash inflows and outflows.
In addition, matching the type of asset and the source of financing is important for managing risk. For example, if an asset is financed with too much debt, it may become difficult to make payments if there is a downturn in the economy or the company's cash flows decline.
Overall, matching the type of asset and the source of financing is an important consideration for any business or individual looking to acquire assets and finance them in a sustainable and appropriate way
What else can I help you with?
The key to current asset planning is the ability of management to forecast sales accurately and then match production schedules with the sales forecast?
true
What is depreciation in terms of accounts?
Depreciation in accounting refers to the gradual decrease in the value of a tangible asset over time. It is a method of allocating the cost of an asset over its useful life, in order to reflect the wear and tear or obsolescence of the asset as it is used in the business operations.
Why depreciation is considered as non-cash item and comes under the heading of operating expenses in Income Statement?
Depreciation is a way to match expenses for an assets that was purchased in a different accounting cycle. As the assets produces income, the expenses of the asset is then matched in following accounting cycles. It is considered an operating expense, since the matching assets is used for business operations.
In transaction management how do you match a transaction to an order?
Search a selected transaction, then search and select the order, then click the match to transaction button to match a transaction to an order.
How do you match a transaction to an order in transaction management?
Search a selected transaction, then search and select the order, then click the match to transaction button to match a transaction to an order.
Match each type of financing with the method used to obtain it. Debt financing equity financing public financing?
Debt financting-taking a loan from a bank Equity financting-selling owership in the company public offering-selling shares of stock on the open market
What is important ipl match or election?
ipl match
Is a match an artificial source?
Yes as it is made in industrys
Is a match a natural or man made light source?
A match is a man-made light source because it is created by the combination of specific chemical components in the match head that produce a flame when struck against a rough surface.
The key to current asset planning is the ability of management to forecast sales accurately and then match production schedules with the sales forecast?
true
What does excluded means on DNA testing?
Excluded in DNA testing means that a particular individual is not a match to a sample or comparison that was tested, indicating that they are not the source of the DNA in question. This can be important in ruling out individuals as potential contributors to a sample or in identifying a match in cases like paternity testing.
What load impedance Z will result in maximum power transfer from an electric source with an internal impedance of r?
For maximum power transfer, source resistance should match load resistance and source reactance should match load reactance with the opposite sign (so if the load is capacitive, the source should be inductive).
Capital budgeting decision making wiht unequal lives?
In capital budgeting with unequal lives first of all time lines are stretched to match exacly same number of years to find out the capital budgeting decision for example one asset with 3 years and another asset is for 4 years will equal to year 12 with asset one will be purchased 4 times while asset two will be purchased for 3 times and then all calculations related to cash inflows and outflows are done.
Can you plug 9V dc to 220v?
No, it is not recommended to plug a 9V DC power source directly into a 220V outlet. Doing so can damage the device connected to the 9V source and pose a safety hazard. It is important to match the voltage requirements of the device with the power source to avoid potential damage or injury.
What is the source of activation energy that ignites a strike-anywhere match?
The source of activation energy that ignites a strike-anywhere match is friction between the match head and the matchbox, which creates enough heat to ignite the match head. When you strike the match against the rough surface on the matchbox, the friction generates heat that is sufficient to initiate the chemical reaction in the match head, leading to ignition.
Match each type of financing with the method used to obtain i?
Venture capital: Group of investors; Angel investment: Wealthy individual; Business loan: Private bank.
Do community colleges offer tuition financing?
You can check out scholarships and grants at scholarships.com or fast web.com. You will be allowed to complete a profile in which will match you with potential grants, schools and scholarships.
