PRC-3 · Chapter 4 · Question 20 of 65
When comparing debt to equity, what is a major financial advantage of using debt to fund business expansion?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) The interest paid on debt is usually tax-deductible
Explanation
A key advantage of debt is that interest payments are treated as business expenses, which reduces the company's taxable income.
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