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2 years ago

Give an example of financial leverage, define it and explain how financial leverage works

1 answer:

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Example: A company spends $5 million to buy prime real estate on which to build a new manufacturing factory. The land is worth $5 million. This is not financial leverage because the corporation is not using borrowed funds to purchase the land.
If the same corporation spent $2.5 million of its own money and $2.5 million in borrowed funds to purchase the same piece of real estate, the company is utilizing financial leverage.

Define: the utilization of fixed expenditures to increase the expected risk and potential return

Explanation: When purchasing assets, the corporation has three alternatives for financing: stock, debt, and leases. Apart from equity, the remaining choices have fixed costs that are lower than the expected income from the asset.

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Advertisers sometimes use words that invite viewers to make an erroneous interpretation; they appear to promise something but in

Verdich [7]

Answer:

Deception

Explanation:

False advertisement is the use of false, misleading, or unproven information to advertise products to consumers. For Example, one type of false advertising is to claim that a product has a health benefit or contains vitamins or minerals in their product whereas actually it does not. This is called "Deception".

Deceptive advertising, also known as false advertising, The use of confusing, misleading, and untrue statements when promoting a product.

If the product representation creates a misleading impression in the mind such as to the price, value or the quality of any goods and services then the behavior is likely to breach the law.

Advertising law will protect consumers from deceptive advertising through the enforcement of specific legislation.

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2 years ago

The 9 digit number that identifies the bank that a check came from is called?

Serhud [2]

It is the bank routing number

4 0

3 years ago

Read 2 more answers

Label each scenario below according to the type of financial asset described.

PSYCHO15rus [73]

Answer:

SCENERIO 1=BOND

SCENERIO 2=LOAN

SCENERIO 3=STOCK

SCENERIO 4=SECURITIES WHICH ARE GUARANTEED BY LOANS

SCENERIO 5=LOAN

Explanation:

Bond is a type of loan or a financial instrument through which large corporations or Government Institutions borrow money from the public with the aim of paying with a fixed interest rate in a given period.

A Loan is amount requested by an organisation from a financial institution with the aim of paying back with some percentage of interest over a given period of time.

Stocks are also known as shares which forms parts of a particular Company sold to the public with the aim of raising capital, SHARES OR STOCK HOLDERS HAVE CERTAIN RIGHTS TO DIVIDEND AND VOTING TO REPLACE BIARD NENBERS ETC WHEN THE NEED ARISE IN THE ORGANISATION.

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3 years ago

Vijay Company reports the following information regarding its production costs. Direct materials $ 9.40 per unit Direct labor $

andriy [413]

Answer:

Unitary cost= $38.2

Explanation:

Giving the following information:

Direct materials $9.40 per unit

Direct labor $19.40 per unit

Variable overhead $ 9.40 per unit

<u>The variable costing method incorporates all variable production costs (direct material, direct labor, and variable overhead) to calculate the unitary cost.</u>

UNitary cost= 9.4 + 19.4 + 9.4

Unitary cost= $38.2

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2 years ago

A business initially sells their product to customers for $50. They find that many people are buying their product so they rise

pav-90 [236]

Answer: It will reduce in demand

Explanation: If you raise a price customers are less likely to buy it when it’s at a higher price

8 0

3 years ago