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If a business owner decided to expand her business by using her own money rather than borrowing money from a bank, then _- OA) she would not be able to earn a profit OB) there is no cost associated with the expansion OC) she would forego the opportunity to earn interest on the money OD) the amount of her funds she used is an explicit cost

Ask by Lawson Ray. in the United States
Mar 15,2025

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The amount of her funds she used is an explicit cost.

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Bonus Knowledge

Expanding a business using personal funds instead of borrowed money can indeed impact financial decisions in various ways. By using her own money, the owner might miss out on potential interest earnings from other investments, which means she’s giving up an opportunity cost. It’s important to weigh the pros and cons of using personal capital versus securing a loan to ensure it aligns with her financial strategy. Additionally, while she won't incur bank-related costs like interest payments, her own capital still carries an implicit cost. She must consider what else those funds could have generated if they were invested elsewhere. So, careful consideration of all potential costs is vital in making the best financial choice!

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