In Scenario 9-1 Above,the Primary Disadvantages of Using Debt Financing

question 14

Multiple Choice

In Scenario 9-1 above,the primary disadvantages of using debt financing are all but which of the following?

• A) It increases risk due to the possibility of insolvency.
• B) It allows a voice in management of the business.
• C) It has to be repaid.
• D) Leverage can enable returns to be lessened.

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Definitions:

Energy Costs

Expenses associated with the consumption of energy, including electricity, gas, and other fuels, crucial for the operation of businesses and households.

Transportation Costs

These are expenses involved in moving goods from one location to another, including costs of fuel, labor, and vehicle maintenance.

Environmental Sustainability

The practice of maintaining productive and healthy environments through responsible interaction with the planet to prevent depletion or degradation of natural resources.

Managing Suppliers

The process of overseeing and coordinating activities with suppliers to ensure the quality, delivery, and cost of goods and services meet an organization's requirements.