Answer:
b. it is appropriate to borrow if the return on the assets is greater than the cost of the financing.
Explanation:
A leverage can be defined as a process which typically involves the use of fixed-charged assets or items in a business with the intention of multiplying potential financial gains and returns.
In Financial accounting, the concept of leverage is that it is appropriate for a business firm to borrow an amount of money (debt), if the return on the assets (capital gain or income) is greater than the cost of the financing (debt or borrowed money).
Basically, financial leverage which is also known as trading on equity, is the utilization of debt (borrowed money) to acquire or purchase new assets with the intent and expectation that the income generated from these assets would exceed the cost incurred from borrowing. Thus, a business that engages in financial leveraging assumes that it would generate a higher income or capital gain from the amount of debt (borrowed money) used in its capital structure.
Answer:
7%
CAPM = 1% + [6% - 1%](1.2) = 1% + 6% = 7%
Answer: The answer is given below
Explanation:
The IS-LM model, simply is an acronym which represents "investment-savings" and the "liquidity preference of money supply". The model indicates the interaction between market for economic goods and the loanable funds market which is also called the money market.
The variables are explained below:
a. Employment: A rise in the spending expenditure will result into an increase in the current or future taxes which will have an effect on the workers by making them poorer and therefore making them offer their services to the labor market. This will lead to a rise in labor supply.
b. The real wage: Due to the increase in labor supply, the real wage will reduce because the supply of labor will be more than the demand.
c. Average labor productivity: The marginal productivity of labor or production function is not influenced by fiscal policy changes.
d. Investment: There will be a leftward upward shift of the LM curve. Due to increase in price of goods and services, and the fall in real money supply, the interest rate will rise therefore making investment to reduce.
e. The price level: Demand for output is more than the full employment level of output. This will bring about increase in price.
Answer:
The correct answer is "$87,750".
Explanation:
In process inventory, the overall cost allocated to the final job would be:
⇒ 
⇒ 
The unit of ending were 100%
⇒ 
($)
Labor = 
= 
($)
In process inventory, the overall cost allocated to the final job would be:
⇒ 
⇒ 
⇒ 
($)
Answer:
option (d) $112,500
Explanation:
Data provided in the question:
Amount for which the customer list is acquired = $400,000
Expected time for which the list will generate the value = 5 years
Time after which the customer plans to sell the list = 3 years
Amount for which the list was sold = $62,500
Now,
Customer lists should be amortized over their useful life i.e the time for which it was used by Springsteen Corp. i.e 3 years
Therefore,
Annual amortization expense = 
or
Annual amortization expense = $112,500
Hence,
The answer is option (d) $112,500
