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Multiple Select QuestionSelect all that applyBusinesses are most likely to spend borrowed loanable funds on which of the following?Multiple select question.WagesWarehousesMachinerySecurities

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Multiple Select QuestionSelect all that applyBusinesses are most likely to spend borrowed loanable funds on which of the following?Multiple select question.WagesWarehousesMachinerySecurities

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Solution

Businesses are most likely to spend borrowed loanable funds on:

  1. Wages: This is not typically what businesses use borrowed funds for. Wages are usually covered by a company's operational budget, which comes from its revenue, not borrowed money.

  2. Warehouses: Yes, businesses might borrow money to invest in physical assets like warehouses. This is a form of capital expenditure, which is often funded through loans.

  3. Machinery: Yes, similar to warehouses, machinery is another form of capital expenditure that businesses might use borrowed funds for. Machinery can help increase production capacity, leading to higher revenues in the future.

  4. Securities: This is less likely. While businesses might invest in securities, it's not common to use borrowed money for this purpose. Investing in securities can be risky, and businesses usually don't take on debt to fund risky ventures.

So, the most likely options are Warehouses and Machinery.

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