The correct answer is D. All of the above.
Permanent working capital is the minimum level of working capital that a company needs to operate on a day-to-day basis. It is made up of the current assets that a company needs to maintain in order to meet its day-to-day obligations, such as accounts receivable, inventory, and cash.
Owner’s funds, bond financing, and term loans are all sources of permanent working capital. Owner’s funds are the funds that are contributed by the owners of a company. Bond financing is when a company borrows money from investors by issuing bonds. Term loans are loans that are made for a specific period of time, usually 5 years or more.
All of these sources of funding can be used to finance permanent working capital. The amount of permanent working capital that a company needs will depend on a number of factors, such as the industry that the company operates in, the company’s business model, and the company’s financial health.
Here is a brief explanation of each option:
- Owner’s funds: Owner’s funds are the funds that are contributed by the owners of a company. These funds can be used to finance the company’s operations, including the purchase of assets and the payment of expenses.
- Bond financing: Bond financing is when a company borrows money from investors by issuing bonds. Bonds are a type of debt security that represents a loan from an investor to a company. The company agrees to pay the investor interest on the loan, as well as the principal amount of the loan, at a specified maturity date.
- Term loans: Term loans are loans that are made for a specific period of time, usually 5 years or more. Term loans can be used to finance a variety of purposes, including the purchase of assets, the expansion of operations, and the repayment of debt.
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