By borrowing $10 million from the First Newfoundland Bank,Cain Industries utilizes:
A)debt financing.
B)liability funding.
C)equity financing.
D)asset funding.

Question

Quizplus · Accepted Answer

By borrowing money from the bank, Cain Industries is utilizing debt financing. This means that they are taking on a liability (the loan) that must be repaid with interest. This is different from equity financing, where a company sells ownership shares in exchange for funding. Asset funding also does not apply in this scenario as they are not using their own assets to secure funding.

By Borrowing $10 Million from the First Newfoundland Bank,Cain Industries