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3 years ago

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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Hyde's Headphones sells deluxe headphones for $ 80 each. Unit variable expenses total $ 45. The breakeven sales in units is 2 c

Gekata [30.6K]

Answer:

$114,320

Explanation:

The computation is shown below:

The margin of safety equals to

= (Expected sales units - break even sales units) × Selling price per unit

where,

expected sales units = 4,329 units

Break even sales units = 2,900 units

And, the selling price per units is $80 each

So, the margin of safety in dollars is

= (4,329 units - 2,900 units) × $80

= 1,429 units × $80

= $114,320

This is the answer but the same is not provided in the given options

5 0

4 years ago

select the department of defense's (dod's) decision-support system that this statement describes: "This system uses milestones t

Marysya12 [62]

Idk this but u can google it and the answer would be right there

6 0

3 years ago

Your firm spends $ 5 comma 200 every month on printing and mailing costs, sending statements to customers. If the interest rate

Korvikt [17]

Answer:

The present value for eliminating this cost will be of $1,130,434.78

Explanation:

we solve for the present value of a perpetual annuity as this cost goes forever unless we change into electronically afterwich; they disappear entirely.

$\frac{C}{r} =PV$

$\frac{5,200}{0.46} = 1,130,434.78$

7 0

3 years ago

Ashley bought a desktop computer and a laptop computer. Before finance charges, the laptop cost $350 more than the desktop. She

Digiron [165]

Answer:

Laptop = $3250

Desktop = $2900

Explanation:

Total finance charge = $398

Laptop cost = 350 + x

Desktop = X

<u>Workings</u>

Finance cost = (7% *X ) + (6% * 350+x ) = 398

0,07 X + 0.06 X + 21 = 398

0.13 X + 21 = 398

0.13 X = 398 -21

0.13 X = 377

Therefore ,X = 377/0.13

=2900

Cost of Desktop = 2900

Cost of Laptop =2900+350 =3,250

6 0

3 years ago

How will a reduction in the price of cotton (a key resource to make jeans) influence the market for blue jeans?

Savatey [412]

Answer:

d. The cost of producing blue jeans will fall, and the supply curve for blue jeans will shift to the right

Explanation:

If the price of cotton falls, the cost of producing blue jeans would fall. As a result of the fall in the cost of production, more producers would be attracted to the industry and production would increase. Increase in supply of blue jeans would shift the supply curve to the right.

I hope my answer helps you

5 0

3 years ago