alleryA burden of borrowed funds is that interest must be paid even when:
ASales are rising
BOrders are full
CEarnings are low
DProfits are high
Answer & Solution
Correct answer: C. Earnings are low
1. Interest does not wait for good years.
2. It is due in loss years too.
3. So it burdens the business when earnings are low.
_Source: syllabus Business Studies, Chapter 8, Sources of Business Finance._
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