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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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5. An investor is interested in purchasing a 30-year U.S. government bond carrying an 8 percent coupon rate. The bond’s current
ella [17]

Answer:

Holding period yield is 114.97%

effective yield is 8.72%

Explanation:

holding period yield=(Price at call-initial price+coupon payments)/initial price

                                =($970-$935)+(13*$80)/$935

                                 =($35+$1040 )/$935

                                 =$1075/$935

                                  =114.97%

The effective yield is the yield to call which can be computed using the excel rate formula:

=rate(nper,pmt,-pv,fv)

nper is the number of payments before the call which is 13

pmt is the periodic payment by bond which is $1000*8%=$80

pv is the current market price of $935

fv is the bond price at end of 13 years at $970

=rate(13,80,-935,970)

rate=8.72%

5 0
3 years ago
Craig, one of the senior managers at Clayton Inc., insisted that company supervisors handle employee relations as part of their
Alekssandra [29.7K]

Answer:

The supervisors represent the company on a day-to-day basis.

Explanation:

Craig said that the supervisors take employee relations as part of their jobs.

The option that buttresses this is that supervisors represent the company on a day-to-day basis. Meaning the supervisors as owners of the company, and as if they have a stake. Supervisors taking ownership presupposes they perform tasks like handling employee relations to ensure the business and the employee work harmoniously.

5 0
3 years ago
If terry's total utility is maximized when he owns 10 pairs of shoes, then terry's total utility from owning 7 pairs of shoes is
Aleks [24]

If terry's total utility is maximized when he owns 10 pairs of shoes, then terry's total utility from owning 7 pairs of shoes is less than terry's total utility from owning 8 pairs.

The benefit that a person receives from consuming all of a given commodity's units at once or over time is referred to as their total utility.

In other terms, total utility is the overall satisfaction attained through the consumption of numerous units of commodities and services. Every unit of a commodity has a marginal utility, which is a benefit gained from consuming an extra unit. The total utility is the total of all these marginal benefits.

The consumer tries to consume various combinations of products and services within the available restricted resources (money) in order to optimise his overall utility. Generally speaking, individuals try to get the most out of the money they spend on goods and services.

Learn more about Total utility here brainly.com/question/9192772

#SPJ4

3 0
2 years ago
As a babysitter, what are three things you should consider from a business perspective?
natta225 [31]

Answer:

Explanation:

Reliability. You want a sitter who respects the babysitting job – and your time enough to show up on time, preparedness. Good sitters come to work with ideas on what to do while they're with your kids, such as games, crafts or other activities, Experience, Ability to take charge

6 0
3 years ago
Read 2 more answers
Which of the following is not one of the steps for recognizing revenue? Identify the performance obligations of the contract. Id
9966 [12]

Answer:

The answer is letter "D": Estimate the total transaction price of the contract based on the sum of the stand-alone selling prices of the goods.

Explanation:

There are five steps for revenue recognition established by the Financial Accounting Standards Board (<em>FASB</em>) which are: <em>Identifying the contract with a customer; Identifying the performance obligations in the contract; Determining the transaction price; Allocating the prices to the performance obligations </em>and<em>; Recognizing revenue.</em>

In that sense, estimating the total transaction price of the contract based on the sum of the stand-alone selling prices of the goods has nothing to do with it.

4 0
3 years ago
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