A Reason Why Profits May Be Retained in a Business

question 57

Multiple Choice

A reason why profits may be retained in a business rather than withdrawn by the owners is:

• A) to fund future growth of the business.
• B) because the business is able to generate greater returns on the funds than could be obtained if the owner invests them elsewhere.
• C) to gain tax advantages.
• D) all of the above.

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Definitions:

Subtract

To take one number away from another, resulting in the difference between the two values.

Cognitive Development

The study of how children and adults develop and evolve in terms of thinking, reasoning, and understanding.

Water

A transparent, odorless, tasteless liquid compound of hydrogen and oxygen, H2O, essential for most plant and animal life and used by all living things.

Glass

A hard, brittle material typically made from silica, used in windows and other items for transparency and strength.