Jtahcek m's afrikrmet ,m baunt uthfaecyt ujurests caa cnl'et amnainngu fparcotudruec tt htheamt hfaasst beeneonu gqhu ittoe skuececpe usspf uwli ithn the demand. Therefore, Jack needs to find a way to ramp up productionand fastor his firm will lose to competitors. Which of the following is the best advice for Jack to profitably increase production capacity?
A) Fund the purchase of increased production capacity with owners' equity, thereby ensuring control and minimizing risk.
B) Fund the purchase of increased production capacity by taking on debt, allowing the firm to have a lower net income through tax deductions and hold on to more cash
C) Fund the purchase of increased production capacity by selling stock. This is the best way to ensure that shareholder value is maximized by building a strong corporate identity
D) Fund the purchase of increased production capacity by selling unused assets. This will purge the company of the fat it needs to shed in order to remain competitive

Question

​Jtahcek m's afrikrmet ,m baunt uthfaecyt ujurests caa cnl'et amnainngu fparcotudruec tt htheamt hfaasst beeneonu gqhu ittoe skuececpe usspf uwli ithn the demand. Therefore, Jack needs to find a way to ramp up production­and fast­or his firm will lose to competitors. Which of the following is the best advice for Jack to profitably increase production capacity?
A) ​Fund the purchase of increased production capacity with owners' equity, thereby ensuring control and minimizing risk.
B) ​Fund the purchase of increased production capacity by taking on debt, allowing the firm to have a lower net income through tax deductions and hold on to more cash
C) ​Fund the purchase of increased production capacity by selling stock. This is the best way to ensure that shareholder value is maximized by building a strong corporate identity
D) ​Fund the purchase of increased production capacity by selling unused assets. This will purge the company of the fat it needs to shed in order to remain competitive

Quizplus · Accepted Answer

Taking on debt to fund the purchase of increased production capacity is the best advice for Jack as it allows the firm to have a lower net income through tax deductions and hold on to more cash. This will also ensure that the firm maintains control and minimizes risk by not diluting ownership through selling stock or shedding unused assets.

​Jtahcek M's Afrikrmet ,M Baunt Uthfaecyt Ujurests Caa Cnl'et Amnainngu

Jtahcek M's Afrikrmet ,M Baunt Uthfaecyt Ujurests Caa Cnl'et Amnainngu