Question

Slater co. has an old, outdated manufacturing facility that needs extensive renovation and expansion. slater does not have the cash available for this renovation/expansion, so it will most likely need which of the following?

a. to use trade credit
b. to obtain an unsecured loan
c. long-term financing
d. a short-term loan

Answer 1

Slater Co. requires extensive renovation and expansion, and they would likely need long-term financing, which allows for capital-intensive investments and expansions to be made over several years.

Step-by-step explanation:

Slater Co., which has an old, outdated manufacturing facility requiring renovation and expansion, will most likely need long-term financing. This is because, on the supply side of markets, it is generally easier for producers to expand production over several years rather than the short run. Short-term loans are typically used for immediate operational needs, while long-term financing is suited for capital-intensive projects like building a new factory, which may take years to complete and generate returns. This would allow Slater Co. to undertake the necessary renovations and expand its production capabilities.