Dividends that were paid last year = $200
Retained earnings = $522
Net Income = Retained earnings + Dividends paid = 200+522 =722
Tax rate was 38%.
Earnings before tax (EBT) = Net income/ (1-tax rate) =722/(1-0.38) = 1,164.52
Interest expense= 624
Earnings before interest and tax (EBIT) = EBT + interest expense = 1,164.52 + 624 = 1,788.52
Earnings before interest and tax (EBIT) = 1,788.52
The more debt used, the greater the leverage a company employs on behalf of its owners.
<h3>
What is financial leverage?</h3>
Financial leverage exists as the usage of borrowed money (debt) to finance the purchase of assets with the anticipation that the income or capital gain from the new asset will surpass the cost of borrowing.
<h3>What is financial leverage example?</h3>
An example of financial leverage use contains utilizing debt to buy a house, borrowing money from the bank to begin a store, and bonds issued by companies.
Debt exists as an obligation that requires one party, the debtor, to pay money or other agreed-upon value to another group, the creditor. Debt stands for deferred payment, or sequence of payments, which distinguishes it from an immediate purchase.
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<span>Ctrl+End
Although this is actually a shortcut method in excel for accomplishing the task in the above named question, there is no other direct methods for selecting the last set of data one is working with in Microsoft excel.</span>
Keynesian economics argues that demand drives supply and that healthy economies spend or invest more than they save. To create jobs and boost consumer buying power during a recession, Keynes held that governments should increase spending, even if it means going into debt.
Keynesian economics is a variety of macroeconomic theories and models of how aggregate demand significantly affects economic output and inflation. From a Keynesian perspective, aggregate demand does not necessarily match the economy's capacity. Instead, it is influenced by many factors that affect production, employment, and inflation.
Keynesian economists generally argue that aggregate demand is volatile and unstable, and as a result, market economies often experience inefficient macroeconomic consequences. They further argue that these economic fluctuations can be mitigated through coordinated economic policies between governments and central banks. Fiscal and monetary policy measures, in particular, help stabilize economic output, inflation, and unemployment throughout the business cycle. Keynesian economists generally advocate a regulated market economy. Although primarily the private sector, it plays an active role in government intervention during recessions.
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The question is reconstructed below:
Which of the following best describes a Nash equilibrium?
A. An outcome from which one or both competitors can improve their position by adopting an alternative strategy.
B. The unstable outcome of a repeated game.
C. An outcome that is stable only because of credible threats.
D. An outcome which both competitors see as optimal, given the strategy of their rival.
Answer:
D. An outcome which both competitors see as optimal, given the strategy of their rival.
Explanation:
Although Nash equilibrium is a game theory, it has been widely applied in economics. It states that a competitor can achieve his desired outcome by sticking to his original strategy. Both competitors' strategies are optimal when considering the decisions of each other.
