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28 Sep 2019
So suppose we plan to build a new facility or buy new equipment both of which will produce future income over the next 25 years. Should we lock up today's cash in an asset, or should we borrow the money and let the future cash flows pay off the use of the building and equipment? Along the same lines, if the government uses debt to invest in programs or infrastructure that will increase productivity, why would they pay out of today's cash when they can let the program or infrastructure's cash flows from the future gains in productivity pay for the investment?
So suppose we plan to build a new facility or buy new equipment both of which will produce future income over the next 25 years. Should we lock up today's cash in an asset, or should we borrow the money and let the future cash flows pay off the use of the building and equipment? Along the same lines, if the government uses debt to invest in programs or infrastructure that will increase productivity, why would they pay out of today's cash when they can let the program or infrastructure's cash flows from the future gains in productivity pay for the investment?
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Romarie Khazandra MarijuanLv10
28 Sep 2019