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matrenka [14]
3 years ago
13

Which is TRUE regarding the trade-off a firm makes when it spends money on an investment project? A. The trade-off a firm faces

when using retained earnings or borrowed funds is the same. B. Borrowing money will always be more expensive than using retained earnings. C. Using retained earnings has a higher opportunity cost than does using borrowed money because retained earnings come from past profits. D. The cost of retained earnings is unrelated to the cost of borrowing money.
Business
1 answer:
luda_lava [24]3 years ago
3 0

Answer:

A. The trade-off a firm faces when using retained earnings or borrowed funds is the same.

Explanation:

  • A trade-off is based on the situational decisions that usually involve the loss of quality and a property that is set or designed to give a return in the other aspects.
  • As one part has to increase and the other has to decrease. The trade-off is commonly expressed as in the terms of opportunity costs which states the loss of the best alternative.
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