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Hello John
I know the matching principle applies when it comes to finance and investments e.g. long term financing for long term investments. Can you please tell me the reasoning behind it? ThanksIt is just that if you were to borrow short term then repayment will be needed in the short term also.
Since the business is likely to need non-current assets for the long term, they don’t want to have to be forced to sell them in order to finance the repayment of short-term borrowing.
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