Glenda Is Trying to Decide Between the Use of Debt

question 8

Multiple Choice

Glenda is trying to decide between the use of debt and the use of equity to finance her young business. She should remember that

• A) her return on assets will be less if she uses debt financing.
• B) using other people's money to finance one's business is seldom a good idea.
• C) the lender will have partial control of the business.
• D) debt must be repaid even if the company does not make a profit.

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Definitions:

Triceps Brachii

A muscle located at the back of the upper limb, responsible for extending the forearm.

Brachialis

A muscle in the upper arm that flexes the elbow joint.

Rectus Abdominis

A long muscle in the front of the abdomen that assists in breathing and stabilizes the core during movements.

External Oblique

A muscle in the abdomen that forms part of the abdominal wall, helping in the rotation and lateral flexion of the trunk.