Which of These Is Not an Advantage of Using Borrowed

question 14

Multiple Choice

Which of these is not an advantage of using borrowed funds to finance a business?

• A) Lenders do not dilute ownership interest in the business.
• B) Interest on borrowing is a legal commitment that must be met.
• C) Interest on borrowings is tax-deductible.
• D) Borrowing can be used to boost returns to owners as long as the return on the funds exceeds the cost of interest.

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Definitions:

Roberts Bartholow

An American physician known for his controversial neurology research, including early brain stimulation experiments on human subjects.

Nervous System

The nervous system is the complex network of nerve cells and fibers that transmits nerve signals between different parts of the body, facilitating communication between the brain, spinal cord, and other organs.

Giant Axon

An unusually large axon that facilitates rapid conduction of neural impulses, found in some animals like squids, allowing them to respond quickly to environmental stimuli.

Squid

A type of cephalopod characterized by a long body, large eyes, eight arms, and two tentacles.