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Slater Co. has very old computers and manufacturing equipment and knows it needs to upgrade them or risk losing much of its business. Slater does not have the money to purchase the computers, so it will most likely need a. to keep using the old computers. b. a short-term loan. c. long-term financing. d. to use increased cash flow from sales. e. to deduct the cost from employees' salaries.

Answer :

jepessoa

Answer:

C) long-term financing.

  • Since computers and manufacturing equipment are expensive, the company will need a log time in order to be able to repay its loan. That is why a long term loan is needed.

Explanation:

the other options are wrong because:

  • a. to keep using the old computers. ⇒ WRONG, BECAUSE SLATER IS RISKING LOSING BUSINESS
  • b. a short-term loan. ⇒ ARE NOT APPROPRIATE BECAUSE COMPUTERS AND MANUFACTURING EQUIPMENT ARE NOT CHEAP, AND THE COMPANY WILL NEED TIME TO PAY BACK THE LOANS
  • d. to use increased cash flow from sales. ⇒ IF IT WAS SO EASY TO INCREASE SALES, THEN THEY SHOULD HAVE DONE IT ALREADY
  • e. to deduct the cost from employees' salaries. ⇒ THAT IS NOT FEASIBLE

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