The source of funds that a firm can use to address cash difficulties within one year is___________
Answer Details
The source of funds that a firm can use to address cash difficulties within one year is an overdraft. An overdraft is a type of short-term loan that a bank extends to its customers, allowing them to withdraw more money than they have in their account. The overdraft limit is typically based on the customer's creditworthiness and cash flow projections, and it must be repaid within a specific time frame, usually within a year. Overdrafts are a common source of funds for businesses that experience temporary cash flow difficulties or unexpected expenses, as they provide quick access to cash and can be repaid relatively quickly. However, overdrafts usually come with high-interest rates, so they should be used sparingly and only as a short-term solution to cash flow problems.