Meister Mixers is planning to build a new production facility next year. The owners visit their bank to borrow the money needed to begin the construction process. Which of the reasons a firm borrows money does thisbest demonstrate?
A) funds for keeping enough product available
B) funds for managing everyday business activities
C) funds for cash leverage
D) funds for extending credit
E) funds for major investments

Question

Quizplus · Accepted Answer

Building a new production facility is a significant capital expenditure, which is a major investment for the company. This type of activity typically requires substantial funds that go beyond the scope of daily business operations, making option E the correct choice.

Meister Mixers Is Planning to Build a New Production Facility