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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Answer:
$69,000
Explanation:
Percentage of shares owned by ABC in Teal's company = 30%
This is an example of equity method investment , and a portion of the attributable income at the end of the year is earned and added to the initial stock.
Attributable income is the remaining income after dividends have been settled.
<u>Workings</u>
The opening carrying value of the shares on ABC balance sheet = 60,000
Profit made at the end of the period = 40,000
Dividends paid = 10,000
Attributable income to share holders = 40000-10000 = 30,000
ABC portion of attributable profit = 30000*30% = 9,000
Carrying value at the end of the year = opening carrying value + portion of the attributable profit
=60000+9000=69000
Answer:
$651,300
Explanation:
Cost of an item of property, plant and equipment comprises of purchase price and any cost directly attributable to bringing the asset to the location and condition for operation as intended by management.
<u>Calculation of the cost of purchase of the land:</u>
Purchase price $ 620,000
Demolition of the old building $ 23,000
Land preparation and leveling $ 8,300
Cost of purchase of the land $651,300
Even though that particular business have the motive of increasing profit there would be a lot of benefits that the society will get such as...
Since most of the business are working for profit in the market this create competition among each other this results to a lower price in markets therfore the society can afford to buy things.
A bad side of such business could be the monopoly power, if there is no company that produces similar good or service they tend to abuse the consumers by increasing the price of the goods and services they provide as there are no other firms that provide similar goods or services.
Answer:
Customer relationship management system (CRM)
Explanation:
A <em>CRM </em>system is what keeps the customer coming back. Instead of targeting each customer with a default bundle of products that are trending, the customer relationship management system tracks down the customer's habits and preferences, creating a tailor-made approach. Every customer is different in things he/she wants to buy. This way, marketing gets more customized and customer statistics generates better reports (more insight for the long-term).
