MANAGEMENT

Detailed explanation-1: -As these assets have long term implication on the business in terms of growth and profitability, they should be financed through long term liabilities such as long term loans, preference shares, retained earnings, etc.

Detailed explanation-2: -Diversifies Capital Portfolio – Long-term financing provides greater flexibility and resources to fund various capital needs, and reduces dependence on any one capital source. It also enables companies to spread out their debt maturities.

Detailed explanation-3: -Long-term finance can be defined as any financial instrument with maturity exceeding one year (such as bank loans, bonds, leasing and other forms of debt finance), and public and private equity instruments.

Detailed explanation-4: -Answer: The financing of long term assets should be made form long term funds. Explanation: Any financial instrument with a maturity of more than one year (such as bank loans, bonds, leasing, and other kinds of debt finance), as well as public and private equity instruments, is considered long-term finance.