Using a loan could help with the purchase of which of the following?

• A. Utility expenses
• B. Employee salaries
• C. A building for business operations
• D. Office supplies for daily use

Answer: (C)

Verified step by step guidance

1. Understand the nature of a loan: A loan is typically used to finance significant, long-term investments or purchases that require a large amount of capital upfront. It is not generally used for recurring or small operational expenses.
2. Analyze the options provided: Utility expenses, employee salaries, and office supplies are recurring operational costs, which are usually covered by the business's operating cash flow rather than loans.
3. Recognize the correct use of a loan: Loans are often used for capital expenditures, such as purchasing a building for business operations, as this is a large, one-time investment that provides long-term benefits.
4. Match the correct answer: Among the options, 'A building for business operations' aligns with the typical purpose of a loan, as it is a significant investment that may require external financing.
5. Conclude: The correct answer is 'A building for business operations,' as it represents a capital expenditure suitable for loan financing, unlike the other options, which are operational expenses.