Businesses usually need to borrow money for investment spending because it takes time before sales revenues flow from newly built factories.

Question

Quizplus · Accepted Answer

Investment spending typically involves building new factories or developing new products, which often takes time before generating sales revenues. In the meantime, businesses may need to borrow money to finance these projects and cover their expenses until the revenues start rolling in.

Businesses Usually Need to Borrow Money for Investment Spending Because