What type of financing is required for a period extending beyond one year?

Long-term financing is necessary for periods extending beyond one year because it is designed to support investments that require a longer timeline for return or payback. This type of financing is often used for significant capital expenditures like purchasing equipment, real estate, or funding large projects that benefit the business over several years. Businesses typically seek long-term financing through loans or bonds, which can extend for several years, ensuring that the capital is available for projects that will yield benefits over an extended duration.

In contrast, short-term financing is typically used for immediate, day-to-day operational needs and is usually expected to be repaid within a year. Intermediate financing serves needs that fall between short and long-term financing, generally spanning from one to three years. Equity financing refers to raising capital by selling shares in the company, which can be either long-term or short-term depending on the investor's intent, but it does not specifically define the duration of the financing period. Therefore, for financing required for a period extending beyond one year, long-term financing is the appropriate choice.