If you look at the information in the question, you'll notice that the return is less than the cost of borrowing (loan interest rate) (ATIRR). This indicates that there is negative leverage and that the property cannot utilise it.
Positive leverage would be created in the first year if the property was purchased with expected returns equivalent to leverage.
Financial leverage is the process of using borrowed money (debt) to buy assets in the expectation that the income from the new asset or capital gain would outweigh the cost of borrowing. The leverage is summed up in this idea. By using debt (loan money), or leverage, we mean to increase the profits on an investment or project.
Leverage allows investors to increase their market buying power.
Leverage is a tool used by businesses to finance their assets. Rather than issuing stock to raise money, businesses can use debt to finance operations in an effort to boost shareholder value.
The most popular financial leverage ratios to determine how hazardous a company's position is are debt-to-assets and debt-to-equity.
To know more about Leverage visit:
brainly.com/question/29032787
#SPJ4
An individual enrolled half time
Answer:
The profit expected from the two IPOs is $2887.5
Explanation:
For the overpriced IPO,1100 shares would be received and since the share was overpriced by $6.25, an instant loss of $6,875
($6.25*1100) is recorded.
For the under-priced IPO ,550 shares (1100 shares divided by 2) would be received and the immediate gain recorded is $9,762.5(550 *$17.75)
Overall the two portfolios, when taken together,give an immediate gain of $2,887.50(gain of $9,762.50 less loss of $6,875
)
This is power of portfolio diversification, that managing potential investment losses by spreading one's investment.
Answer:
$0.70
Explanation:
Given that,
Direct materials costs = $660,000
Direct labor costs = $3,100,000
Factory overhead costs applied = $2,170,000
company's predetermined overhead rate for year 2017:
= Factory overhead costs applied ÷ Direct labor costs
= $2,170,000 ÷ $3,100,000
= $0.70
Therefore, the company's predetermined overhead rate is 0.70
Answer:
The answer is C.
Explanation:
Unemployment is a situation in which those who are willing and able to work can not get the job i.e those who are actively searching for a job can't get one.
While employment is when those that are willing and able to work are employed.
Therefore, labour force is the addition of employed people and unemployed people.
