The more debt used, the greater the leverage a company employs on behalf of its owners.
<h3>
What is financial leverage?</h3>
Financial leverage exists as the usage of borrowed money (debt) to finance the purchase of assets with the anticipation that the income or capital gain from the new asset will surpass the cost of borrowing.
<h3>What is financial leverage example?</h3>
An example of financial leverage use contains utilizing debt to buy a house, borrowing money from the bank to begin a store, and bonds issued by companies.
Debt exists as an obligation that requires one party, the debtor, to pay money or other agreed-upon value to another group, the creditor. Debt stands for deferred payment, or sequence of payments, which distinguishes it from an immediate purchase.
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Answer:
Tiger Trade
Cash Flow Statement
Cash flows from operating activities:
- Cash received from sale of products to customers $35,000
- Cash received for sale of services to customers $25,000
- Cash paid to merchandise suppliers ($11,000)
- Cash paid to workers ($23,000)
- Cash paid for advertisement ($3,000)
<u>Total cash flow from operating activities $23,000</u>
Cash flows from investing activities:
- Cash received from the bank for long-term loan $40,000
- Cash paid to purchase factory equipment ($45,000)
- Cash received from the sale of an unused warehouse $12,000
<u>Total cash flow from investing activities $7,000</u>
Cash flows from financing activities:
- Cash paid for dividends to stockholders ($5,000)
<u>Total cash flow from financing activities ($5,000)</u>
Net cash increase $25,000
Cash balance at the beginning of the period $4,000
<u>Cash balance at the end of the period $29,000</u>
Option answer:
c. Interest = $54 and Balance = $1254
Answer:
A = $1,254.00
I = A - P = $54.00
Equation:
A = P(1 + rt)
Calculation:
First, converting R percent to r a decimal
r = R/100 = 3%/100 = 0.03 per year.
Solving our equation:
A = 1200(1 + (0.03 × 1.5)) = 1254
A = $1,254.00
The total amount accrued, principal plus interest, from simple interest on a principal of $1,200.00 at a rate of 3% per year for 1.5 years is $1,254.00.
Answer:
Private brands tend to be cheaper than name brand goods
Explanation:
