When Parul's children started college, she realized she needed to make money quickly, so she decided to increase production and distribution of the company's most popular product line. To do so, Parul borrowed money from the bank to cover the company's additional operating costs. Which reason why companies need to obtain financing is demonstrated in this example?
A) funds for managing everyday business activities
B) funds for extending credit
C) funds for unrelated business expenses
D) funds for making major investments
E) funds for capital expenditures

Question

Quizplus · Accepted Answer

This example demonstrates the need for funds to manage everyday business activities, as Parul needed to cover additional operating costs to increase production and distribution.

When Parul's Children Started College, She Realized She Needed to Make