Example: A company spends $5 million to buy prime real estate on which to build a new manufacturing factory. The land is worth $5 million. This is not financial leverage because the corporation is not using borrowed funds to purchase the land.
If the same corporation spent $2.5 million of its own money and $2.5 million in borrowed funds to purchase the same piece of real estate, the company is utilizing financial leverage.
Define: the utilization of fixed expenditures to increase the expected risk and potential return
Explanation: When purchasing assets, the corporation has three alternatives for financing: stock, debt, and leases. Apart from equity, the remaining choices have fixed costs that are lower than the expected income from the asset.
<u>Answer:</u> Personal goals and team fit.
<u>Explanation:</u>
As a student I would not have any experience which I can talk about at the job interview. It is important that I show case my personal goals which are short term and long term career goals. I also need to show that I desire to join the team and have the ability to work as a good team member.
The common skills required to fit into a team such as management skills, leadership skills, communication skills, time management skills, organizing skills etc employers will not understand when I fail to take time to develop these skills.
Answer:
Dr. Cr.
Note Receivable $6,000
Account Receivable $6,000
Explanation:
Note is received against a payment of sale mad on credit. A new receivable will be built with the name of Note receivable, so this account will be debited. To deduct the value from the account receivable we will credit the account receivable account due to its debit nature. Later on the interest will be accrued and added in this balance.
Answer:
having lower overhead costs.
Explanation:
Robert started his company in his mother's garage so he did not have to pay rent or lease at the initial stage of his business. This gave him the opportunity to put his finances in essential aspects of his business.
Therefore he had an opportunity to reduce his overhead cost.
The third function explains that money is a medium of exchange. It means that it is better to use the money used in the country itself to gain better service because it would provide better protection. Costumers would be more satisfied if the business would accept the money they have and it would be safer and mutually good for both if the customer would transact using the currency country's currency.
Source: https://www.stlouisfed.org/education/economic-lowdown-podcast-series/episode-9-functions-of-money
