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
Answer:
$34,116
Explanation:
To determine how much Pete would should save, we have to determine the present value of $13,000
Present value is the sum of discounted cash flows
present value can be calculated with a financial calculator
Cash flow each year from year 1 to 3 = $13,000
I = 7%
Present value = $34,116
To find the PV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
Answer:
B. will be guilty of taking a secret profit if he does not disclose to the landlord
Explanation:
Acceptance of any gifts or payments in return for fixing up a contract and or acting as a middleman in negotiating a deal constitutes a bribe or a kickback.
In the given case, the carpet seller is willing to give project manager, super bowl tickets in return for facilitating the large order from the landlord.
Here, the landlord is not aware of this scheme and if the property manager accepts such gifts without informing the first party i.e the landlord, would amount to making secret profits.
Thus, in compliance with right ethical practices, it is the duty of the project manager to inform the landlord of the gift and it's nature before accepting any of those.
Answer:
The amount that Gees Consulting would report as the ending balance in the R. Gees, Capital account at the end of the year is $8,000
Explanation:
For computing the ending balance of capital account, first, we have to compute the net income or loss which is shown below:
Net income/loss = Fees revenue - salary expense - rent expense - supplies expense
= $10,000 - $7,000 - $6,000 - $6,000
= ($19,000)
Now the ending balance would be
= Opening capital - net loss - drawings
= $18,000 - $9,000 - $1,000
= $8,000
Answer:
30%
Explanation:
For computing the percentage of the total overhead cost we need to find first plantwide overhead rate and Product J25M (absorbed overhead) which is shown below:-
Plantwide overhead rate = Total plant overhead ÷ Total number of labor hours
= ($120,000 + $90,000 + $84,000 + $300,000) ÷ (7,000 + 3,000)
= $594,000 ÷ 10,000
= 59.4 per labor hour
Product J25M (absorbed overhead) = Plantwide overhead rate × Direct labor hours of Product J25M
= $59.4 × 3,000
= $178,200
So, the Percentage of the total overhead cost = Product J25M (absorbed overhead) ÷ Total plant overhead × 100
= $178,200 ÷ $594,200 × 100
= 30%
