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.
<span>the services that Williamson mentions are usually paid for using federal income tax, and those that are paid for using state sales tax or property taxes are :
</span>
● Federal income tax : Entitlement Programs,
Education, Technology, Defense and Security, Social Security, Health
Problem Programs such as Medicare, Aid programs, Interest
on National Debts, Scientific and Medical Research, Transportation)
● Sales tax and property taxes : Roads, Schools, Sewer system,
Healthcare, E<span>ducation, Local Government Aid, Property Tax Relief,
Social Service Programs, Highways, Economic Development
Incentives and Grants for businesses, and other state programs and operations.</span>
Answer:
C(100) = (75 x 100) + (200 x 100) = $27,500
Explanation:
the initial cost function of producing bikes is:
C(x) = 75F + 100W
the initial cost to produce 1 bike = $75 + $100 = $175
if the cost of wheels increase to $100 each, then the cost function is:
C(x) = 75F + 200W
in this case, there is not much to calculate since every bicycle must have 1 frame and 2 wheels, that means that in order to produce 100 bicycles you will necessarily need 100 frames and 200 wheels. Labor is not considered in this cost function, so any cost minimization strategy is limited to using the minimum amount of parts:
C(100) = (75 x 100) + (200 x 100) = $27,500
A home equity would be the right answer
