Exam Base WASSCE Daily

The correct answer is D. improve and expand business

The complete sentence is: Ploughing profit back enables the entrepreneur to improve and expand business.

Explanation:

Reinvesting profits back into the business, also known as ‘ploughing back profits’, allows an entrepreneur to improve and expand their business operations. This could involve upgrading equipment, hiring more staff, increasing production capacity, or opening new locations. By reinvesting profits, the business can grow and become more competitive in the market.

Other options:

A. benefit from tax exemptions While some businesses may qualify for certain tax exemptions, this is not directly related to reinvesting profits. Tax exemptions are usually based on factors like the type of business, location, or specific government programs.
B. pay back bank loans Paying back loans is an obligation, not a benefit of reinvesting profits. In fact, reinvesting profits may delay the repayment of loans if the money is being used to grow the business instead of paying off debts.
C. pay workers attractive wages While business growth fueled by reinvested profits could potentially lead to higher wages in the long run, directly paying higher wages is not usually the primary reason for reinvesting profits. The focus is typically on overall business improvement and expansion.

Solution

Explanation:

Other options: