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Tems11 [23]
3 years ago
9

The concept of leverage is that a.a high debt-to-equity ratio is favorable. b.it is appropriate to borrow if the return on the a

ssets is greater than the cost of the financing. c.it is appropriate to borrow as long as the lender approves the loan. d.it is unfavorable to borrow funds rather than raise the capital from stockholders.
Business
1 answer:
Travka [436]3 years ago
7 0

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.

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The multiplier effect of changes in government transfers is: greater than the multiplier effect of a change in government spendi
sergiy2304 [10]

Answer: less than the multiplier effect of a change in government spending.

Explanation:

The multiplier effect of government transfers refers to the measure by which the aggregate demand will increase by as a result of government transfers increasing.

This multiplier is less than the multiplier effect of a change in government spending. This is because government spending affects more people in the economy as it targets both companies and consumers. Government transfers on the other hand, target only welfare and unemployment payments amongst others so it cannot have the same effect as government spending.

5 0
2 years ago
Your bank card has an APR of 21% and there is a 3% fee for cash advances. The bank starts charging interest on cash advances imm
avanturin [10]

Answer:

Total finance charge=$23.75

Explanation:

<em>The amount charged for the use of the fund by a bank is called interest rate. Here it is quoted as 21% per annum but we will need to determine the approximate monthly rate by dividing by 12</em>.

The total finance charge will be equal = Interest rate + advance fee

Monthly interest rate = 21/12 =1.75%

Interest payment = 1.75%× $500=$8.75

Advance fee = 3%× $500= $15

Total finance charge = $8.75 +  $15= $23.75

Total finance charge=$23.75

6 0
3 years ago
Which part of the check is least important
lyudmila [28]

Answer:

All information of the check is important,so make sure that the bank yellers,retailers and check scanners can get the details needed. The payee name,amount in words,account AMD routing numbers and signature are absolutely essential.

5 0
3 years ago
Markets typically trade short-term, highly liquid securities.
Paul [167]
What is the question you are looking to have answered?
3 0
3 years ago
You have just received notification that you have won the $1.25 million first prize in the Centennial Lottery. However, the priz
MrRa [10]

Answer:

$9,300.82

Explanation:

The formula for calculating present value:

P = FV (1 + r)^-n

FV = Future value = $1.25 million

P = Present value

R = interest rate = 6.4 percent.

N = number of years = 79

1.25 (1.064)^-79 = $9,300.82

I hope my answer helps you

5 0
3 years ago
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