A Business Will Be Likely to Borrow to Fund Projects

question 13

Multiple Choice

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

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

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Definitions:

Personal Selling

A direct form of selling where salespersons interact face-to-face with customers to explain or demonstrate the benefits of their product or service.

Standardized Good

A product that is uniform in quality and specifications across all units and is often mass-produced.

Risky

Entails exposure to danger, harm, or loss, often used to describe investments or decisions with a high potential for negative outcomes.

Productivity

The measure of efficiency in converting inputs into useful outputs, often assessed in the context of work, manufacturing, and time management.