If she finances the new plant with short-term debt the


Barbara Monroe, the chief financial officer of Helaine Inc., is considering the options available to her for financing the company"s new plant. Shortterm interest rates right now are 6%, and long-term rates are 8%. The company"s current ratio is 2.2:1. If she finances the new plant with short-term debt, the current ratio will fall to 1.5:1. Briefly discuss the issues that Barbara should consider.

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Accounting Basics: If she finances the new plant with short-term debt the
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