Choose all that apply. Which of the following would be considered good reasons for a business to borrow money?

Question

Responses

To pay off the owners home mortgage.
To pay off the owners home mortgage.

To purchase assets.
To purchase assets.

To repay information sources of funds used before.
To repay information sources of funds used before.

To buy back equity in the company.

Answer 1

The good reasons for a business to borrow money from the options provided would be:

1. To purchase assets. - This is a common reason for businesses to borrow money, as acquiring assets can help generate revenue and grow the business.

2. To repay information sources of funds used before. - If the funds previously borrowed have less favorable terms or are urgently needed, it can make sense to refinance or repay those debts.

Regarding the other options:

• To pay off the owner's home mortgage. - This is generally not a business-related reason for borrowing and is more personal.

• To buy back equity in the company. - While there can be strategic reasons for doing this, it might not be seen as the most prudent business reason for borrowing on its own, depending on the financial situation of the business.

In summary, the good reasons for a business to borrow money are "To purchase assets" and "To repay information sources of funds used before."