Final answer:
Companies may need to borrow money even if they have a positive cash balance. Borrowing can provide additional funds for investment or expansion projects without diluting ownership or control. Low interest rates can make borrowing a strategic financial decision.
Step-by-step explanation:
When a company has a positive cash balance, there may still be situations where it is required to obtain proceeds from borrowing. This can happen when the company needs additional funds for investment or expansion projects that exceed its available cash balance. Borrowing allows the company to access capital without diluting its ownership or control, unlike issuing stock. Additionally, borrowing can be a strategic financial decision when interest rates are low, enabling the company to take advantage of favorable borrowing conditions.