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victus00 [196]
3 years ago
13

A company investing borrowed funds expects to earn a return greater than the interest it will pay for the use of funds is using

Business
1 answer:
Naddika [18.5K]3 years ago
3 0

Answer:

Financial leverage

Explanation:

Financial leverage is defined as the use of borrowed funds to perform a business activity or investment that is expected to have higher returns than the cost of borrowing the money (interest).

When a company is looking for funds for its activities there are 3 options they can use: equity, debt, or lease.

Use of equity is the only option where no extra cost is incurred for use of funds.

When using debt or lease cost of use is incurred. The business will need to engage in an activity that will give it revenue above cost of debt.

This practice is called use of financial leverage.

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According to keynesianism, as more items are being made, what happens to prices?
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<u>According to keynesianism, as more items are being made, what happens to prices D. the prices stay the same</u>

Explanation:

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Keynesians believe that, because prices are somewhat rigid, fluctuations in any component of spending like consumption, investment, or government expenditure will cause the output to change. If government spending increases, for example, and all other spending components remain constant, then output will increase.

<u>According to keynesianism, as more items are being made, what happens to prices D. the prices stay the same</u>

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Explanation:

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3 0
3 years ago
A friend tells you that they cannot afford to pay fof the standardized tests that needs to be taken to apply for college and mil
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