It is becoming a global center for it, computer programming, and software.
As the CFO has been asked to present a financing plan to the board, his best approach to keep the company from being heavily leveraged from product launch will be to maintain a moderate debt level.
<h3>What do we mean by Financial leverage?</h3>
Basically, a leverage means the use of debt (borrowed capital) in order to undertake an investment or project. The result of the process is to multiply the potential returns from a project but it will also multiply the potential downside risk in case the investment does not pan out.
Going forward, when we refers to a company as "highly leveraged," this means that item has more debt than equity. In conclusion, most investors use leverage to significantly increase the returns that can be provided on an investment.
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If a company increases its fixed costs for product b, then the contribution margin per unit will remain the same.
<h3>What is fixed cost?</h3>
- Fixed costs, sometimes referred to as indirect costs or overhead costs in accounting and economics, are costs incurred by a corporation that are independent of the volume of goods or services the company produces.
- They frequently occur again and again, like monthly rent or interest payments.
- These expenses are often capital expenses as well.
- Contrast this with variable costs, which depend on volume (and are based on the quantity produced) and are unknowable at the start of the accounting year.
- Some variable costs are affected by the type of fixed costs.
<h3>What is company?</h3>
- A corporation, often known as co., is a legal entity that stands for a group of people with a certain goal who are either natural, legal, or a combination of the two.
- Members of the company work together for a shared cause in order to accomplish clearly stated objectives.
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Answer:
The correct answer is letter "E": Lean business model.
Explanation:
The lean business model is a study that aims to improve the efficiency of a company. That can be achieved by implementing new practices to eliminate old, ineffective strategies, analyzing the company product mix to find out if unprofitable goods are being still produced or rearrange unit teams. Improving leadership skills, workers' commitment, and the institution's growth are some of the advantages of the lean business model.
Answer:
option 2
Explanation:
to determine the better option, calculate the present value of option 2. The more suitable option is the option with the higher present value
Present value is the sum of discounted cash flows
Present value = future value / ( 1 + r)^n
r = interest rate
n = number of years
6500 / ( 1.08^3) = 5159.91
the present value of option 2 is higher than that of option 1,, so pick option 2
