A Business Will Be Likely to Borrow to Fund Projects

question 274

Multiple Choice

A business will be likely to borrow to fund projects if the:

• A) rate of return on the project is less than the interest rate on the loan.
• B) project will produce a good or service that is in high demand.
• C) rate of return on the project is at least as high as the interest rate on the loan.
• D) minimum efficient scale will be attained.

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Definitions:

Brainstorming

The process of generating creative, spontaneous ideas from all members of a group without any criticism or judgment.

Organizational Structure Innovation

The process of modifying or creating new organizational structures to better support creativity, flexibility, and responsiveness to changes in the market or environment.

Operational Innovation

The implementation of new business processes or the modification of existing processes to improve efficiency, quality, or performance.

Process Innovation

The development and implementation of new or improved production or delivery methods, enhancing efficiency, quality, or performance.