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3 years ago

Leverage _ the return to shareholders and _ the risk of their investment

Business

1 answer:

Dima020 [189]3 years ago

3 0

Answer:

d. increases; increases

Explanation:

Leverage describes the method of capital acquisition. The term is used mostly to refer to the borrowing of capital. A highly leveraged business is a business that has a high percentage of debts.

Business borrows for expansion or to finance the acquisition of assets. By borrowing, the company increases its capacity to produce and consequently, the possibility of an increase in sales. An increase in output leads to high returns to the shareholders.

Higher returns can only be achieved if the market behaves as expected. If operations do not go as planned, then leverage will leave the shareholder exposed to higher risks. The losses likely to be suffered will be proportional to the level of leverage.

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4 years ago

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4 years ago

During the current year, Vann County’s motor pool internal service fund sold two vehicles for $5,000. The vehicles had a cost of

Anni [7]

Answer:

Gain of $1000

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Hope this helps you. Good Luck.

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3 years ago

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Suppose a pizza parlor has the following production costs: $5.00 in labor per pizza, $4.00 in ingredients per pizza, $0.80

Lerok [7]

Answer:

The variable cost of the production amounts to $29,400

Explanation:

Variable costs are those kind of expenses which changes as the quantity of the good as well as the service that produces by business changes.

The variable cost of the production is computed as:

Variable cost = Labor cost per pizza + ingredients cost per pizza + Electricity cost per pizza

where

Labor cost per pizza is $5.00

Ingredients cost per pizza is $4.00

Electricity cost per pizza is $0.80

Putting the values above:

Variable cost = $5.00 + $4.00 + $0.80

Variable cost = $9.00 + $0.80

Variable cost = $9.80

Now, computing the variable cost of production as:

Variable cost of production = Variable cost × Pizza produces per month

Variable cost of production = $9.80 × 3,000

Variable cost of production = $29,400

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3 years ago

Leverage _____ the return to shareholders and _____ the risk of their investment

Leverage _ the return to shareholders and _ the risk of their investment