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3 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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You want to go the Six Flags amusement park. The ticket price to enter and enjoy the rides in Six Flags is $65. You live in Rich

Lyrx [107]

Answer:

Results are below.

Explanation:

<u>The opportunity cost is the amount of money that you won't earn when choosing one option over another. </u>In this case, one option makes you expend money and the other earn money.

Opportunity cost= 12*4 + 25

Opportunity cost= $73

<u>Now, the total cost incorporated what you will expend in Six Flags:</u>

Total cost= 65 + 40 + 73

Total cost= $178

4 0

3 years ago

What is the npv assuming cash flows all come at the end of each period wall street prep?

VMariaS [17]

The npv assuming cash flows all come at the quit of each length of wall road prep is the net gift value (NPV) component. the existing value (PV) of a move of cash flows represents how a great deal the future coins flows are well worth as of the cutting-edge date.

Cash flows refer to the net balance of coins stepping into and out of an enterprise at a specific point in time. coins are constantly stepping into and out of a business. for instance, whilst a store purchases stock, cash flows out of the commercial enterprise toward its providers.

Add your internet income and depreciation, then subtract your capital expenditure and trade in working capital. loose coins waft = net income + Depreciation/Amortization – change in operating Capital – Capital Expenditure. net earnings are the organization's income or loss in the end its expenses had been deducted.

Cash flows is essential to be understood properly as it facilitates you to become aware of your assets of income and the way you spend your cash. Armed with this knowledge, you can take the proper motion to hold a tremendous coin flow and in the long run reap your monetary desires.

Learn more about Cash flows here:

brainly.com/question/735261

#SPJ4

5 0

1 year ago

What's pricing strategy

Sedaia [141]

Answer:

<em>A pricing strategy takes into account segments, ability to pay, market conditions, competitor actions, trade margins and input costs, amongst others. It is targeted at the defined customers and against competitors.</em>

Explanation:

A business can use a variety of pricing strategies when selling a product or service. To determine the most effective pricing strategy for a company, senior executives need to first identify the company's pricing position, pricing segment, pricing capability and their competitive pricing reaction strategy

7 0

3 years ago

Read 2 more answers

Ayala Architects incorporated as licensed architects on April 1, 2017. During the first month of the operation of the business,

JulsSmile [24]

Answer:

Ayala Architects

General Journal

April 1

Debit : Cash $18,270

Credit : Common Stock $18,270

April 1

Debit : Salaries expense ($381 x 4) $1,524

Credit : Salaries Payable $1,524

April 2

Debit : Rent expense $914

Credit : Cash $914

April 3

Debit : Supplies $1,320

Credit : Accounts Payable - Burmingham Company $1,320

April 10

Debit : Accounts Receivable $1,929

Credit : Service Revenue $1,929

April 11

Debit : Cash $711

Credit : Deferred Revenue

April 20

Debit : Cash $2,842

Credit : Service Revenue $2,842

April 30

Debit : Salaries expense $1,524

Credit : Cash $1,524

April 30

Debit : Accounts Payable - Burmingham Company $305

Credit : Cash $305

Explanation:

Journal entry for the transactions have been prepared above.

4 0

3 years ago

In which basic market would stoves be traded?

VashaNatasha [74]

Answer:

<h3>the labor market</h3>

Explanation:

<h2>#carry on learning</h2>

4 0

3 years ago