It is most likely that a firm would borrow funds to expand its capital facilities when the

Question

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When a firm expects a rate of return that is greater than the interest rate, it makes sense to borrow funds to invest in capital facilities that will generate a return higher than the interest paid on the loan. This is a common strategy for firms looking to expand and grow their business. The other options - A, C, and D - do not necessarily indicate a reason for a firm to borrow funds for expansion.

It Is Most Likely That a Firm Would Borrow Funds