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.

Question

Quizplus · Accepted Answer

The statement "Interest on borrowing is a legal commitment that must be met" is actually an advantage. The other options are all advantages of using borrowed funds to finance a business.

Which of These Is Not an Advantage of Using Borrowed