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 assets 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.

Answers

Answer 1

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.


Related Questions

The Assembly Department started the month with 83,000 units in its beginning work in process inventory. An additional 334,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department. There were 34,000 units in the ending work in process inventory of the Assembly Department. How many units were transferred to the next processing department during the month

Answers

Answer:

383,000

Explanation:

Calculation to determine How many units were transferred to the next processing department during the month

Work in process, beginning 83,000

Add Units started into production during the month 334,000

Less Work in process, ending (34,000)

Units completed and transferred out during the month 383,000

(+83,000+334,000-34,000)

Therefore How many units were transferred to the next processing department during the month is 383,000

If a firm's marginal tax rate is increased, this would, other things held constant, lower the cost of debt used to calculate its WACC. True False

Answers

Answer:

The answer is "True".

Explanation:

The marginal rate is indeed the extra income tax about any dollar earned as income. Its annual tax rate is the total tax paid divided by the total earnings. This marginal rate of 10% will impose a tax of 10 cents on every following income spent. that's why the given statement is true because the cost of debt [tex]= k\times (1-t)[/tex]   and its t value will increase the cost of the decrease.

A state is conducting an examination of mortgage loan originator Basil Thyme. During the examination, the agency is authorized to do all of the following, except:a. Administer oaths or affirmationsb. Control access to Basil’s officec. Subpoena witnessesd. Require production of relevant documents

Answers

Answer: B. Control access to Basil’s office.

Explanation:

During the conduct of the examination of mortgage loan originator Basil Thyme, the agency is authorized to administer oaths or affirmations, subpoena witnesses and require production of relevant documents.

The agency cannot control the access to Basil's office. It can only control access to any records or documents of an individual whim is under investigation.

ways an entrepreneur can attain objectives of being self employed

Answers

Answer:

An entrepreneur can achieve his objectives of being self employed in the following ways.

1 Works Hard. ...

2 When he/she is Energetic. ...

3 Wants Financial Success. ...

4 Has Family Support:

5 Takes Risks: ...

6 Sacrifices Employment Benefits: ...

7 Has a Need to Achieve: ...

8 Has Business Experience:

how does under investment affect the market​

Answers

Since the stock market is a vote of confidence, a crash can devastate economic growth. Lower stock prices mean less wealth for businesses, pension funds, and individual investors. Companies can't get as much funding for operations and expansion. When retirement fund values fall, it reduces consumer spending.

Answer:

Since the stock market is a vote of confidence, a crash can devastate economic growth. Lower stock prices mean less wealth for businesses, pension funds, and individual investors. Companies can't get as much funding for operations and expansion. When retirement fund values fall, it reduces consumer spending.

Explanation:

Economic Considerations

Business investment can affect the economy's short-term and long-term growth. In the short term, an increase in business investment directly increases the current level of gross domestic product (GDP), because physical capital is itself produced and sold.

a. If a wage of $10.25 were to be imposed on this market, such that the market was not longer strictly competitive, what would be the value for labor supply?
b. At the imposed wage of $10.25 what would be the value for labor demand?
c. Provide a properly labeled and appropriately articulated Labor Market Model given the labor supply and demand equations provided and the imposed wage of $10.25.
d. Based on the labor market model you’ve now illustrated, how would you describe the current condition of this market given the imposed wage?

Answers

Solution :

Given the wage = $ 10.25 that is to be imposed to the market.

Given equation :

[tex]L_D[/tex] = 500 – 45W and [tex]L_S[/tex] = -200 + 25W

If the wage of $10.25 is to be imposed to the market, the value of the labor supply can be found by putting the value of the wage in the labor supply equation.

At W = 10.25

Putting this value in the above equation, the labor supply would be

[tex]L_S[/tex] = -200 + 25W

[tex]L_S[/tex] = -200 + 25(10.25)

     = 56.25

When W = 10.25, the value for the labor demand can be found by :

[tex]L_D[/tex] = 500 – 45W

[tex]L_D[/tex] = 500 – 45(10.25)

[tex]L_D[/tex] = 500 – 461.25

[tex]L_D[/tex] = 38.75

Therefore, the labor demand and the labor supply model is

[tex]L_D[/tex] = 400 - 45 x 10.25

[tex]L_S[/tex] = -200 + 25 x 10.25

Kleen Company acquired patent rights on January 10 of Year 1 for $400,000. The patent has a useful life equal to its legal life of eight years. On January 7 of Year 4, Kleen successfully defended the patent in a lawsuit at a cost of $20,000.

Required:
a. Determine the patent amortization expense for the Year 4 ended December 31.
b. Journalize the adjusting entry on December 31 of Year 4 to recognize the amortization.

Answers

Answer:

a. Particulars                                  Amount  

Patent cost                                     $400,000  

Less: Amortization for 3 years      $150,000 ($400,000*3/8)

Book value at the end of year 3  $250,000

Addition during Year 4                  $20,000  

Total book value                            $270,000

Patent amortization expense for the Year 4 = Total book value / Remaining life

Patent amortization expense for the Year 4 = $270,000 / 5

Patent amortization expense for the Year 4 = $54,000

b.                       Adjusting Entry

Date  Account titles                   Debit       Credit

         Amortization expense    $54,000

                Patents                                       $54,000

A company must invest in project 1 in order to invest in project 2. Which of the following constraints ensures that project 1 will be chosen if project 2 is invested in?

a. X1 + X2 = 1
b. X1 - X2 < = 0
c. X1 - X2 > = 0
d. X1 + X2 = 0

Answers

The correct answer is C

X1 - X2 > = 0, constraints ensures that project 1 will be chosen if project 2 is invested. Thus, option (c) is correct.

What is company?

The term "company" refers to legal entities that are lawfully registered under the Company Act. The company's major goal is to increase profits while maintaining goodwill. With the assistance of management, the organization was flawlessly run. Employees are compensated by the company.

According to the company was the invested in the two projects.

The equation was the X1 - X2 > = 0.

If X1 = 0, X2 will be 0

A company was the equal spend on the projects.

A company are the not less than zero is the investing.

Both should be greater or equal to 0.

As a result, the X1 - X2 > = 0, constraints ensures that project 1 will be decided if project 2 is invested.  Therefore, option (c) is correct.

Learn more about on company, here:

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Partial annual report of a company shows the following information. Calculate the inventory turnover for this company. Net revenue $75,000 Cost of goods sold $62,000 Value of raw materials on-hand $12,300 Value of work-in-process inventory $5,000 Value of finished goods on-hand $6,700

Answers

Answer: More than

Explanation:

Inventory turnover will be calculated as:

= Cost of goods sold / Average Inventory

Average Inventory will be:

= (Beginning inventory + Ending inventory) / 2

= ($5000 + $12300)/2

= $17300/2

= $8650

Then, Inventory turnover will be:

= Cost of goods sold / Average Inventory

= $67000/$8650

= 7.74

The correct option is "More than 4"

The ____ is equal to the sum of the squares of the market shares of all the firms in an industry. a. market concentration ratio b. Herfindahl-Hirschman index c. correlation coefficient d. standard deviation of concentration e. none of the above

Answers

Answer:

b. Herfindahl-Hirschman index

Explanation:

Option b. Herfindahl-Hirschman index

The HHI is calculated by taking the square of the market share and then adding all the squared values. Thus, the resulting answer will be the HHI magnitude.

Draw the Marijuana Market (both a supply and demand) and label everything. You can choose a P1 or Q1 option instead of numbers or choose your own numbers. Shift the curve that would occur in the following market for marijuana if the government imposes an excise tax on marijuana sales. What will be the effect on price and quantity

Answers

Solution :

The diagram depicts the market for Marijuana where DD represents the demand curve and SS represents the supply curve and initial equilibrium occurs at the point [tex]E_1[/tex], where [tex]P_1[/tex] is the initial equilibrium price and [tex]Q_1[/tex] is the initial equilibrium quantity.

An excise tax on marijuana sales will increase the cost of the production of marijuana and shift the supply curve leftwards to S+tax with new equilibrium at point [tex]E_2[/tex] where the equilibrium price of marijuana has increased to [tex]OP_2[/tex] and equilibrium quantity of marijuana has decreased to [tex]OQ_2.[/tex]

Which of the following is considered the process in the systems thinking example of a decision support system?
a. transaction
b. processing system.
c. optimization
d. forecasts

Answers

Answer: C. Optimization

Explanation:

In the decision making system, TPS is considered to be the input in the systems thinking example.

In the decision making system, optimization is considered to be the process in the systems thinking example.

In the decision making system, TPS is considered to be the input in the systems thinking example.

In the decision making system, a forecast is considered to be the output in the systems thinking example.

ba 101 Jane has discovered that she is bored and frustrated working for others. She wants to open a business where she alone will have control and the least interference from government regulation. Which form of business would best meet her needs

Answers

Answer: Sole proprietorship

Explanation:

Sole proprietorship is also called the sole trader or one man business. This is a form of business that's owned and.conteoooed by a single person.

A sole proprietorship is regarded as the easiest form of business to set up due to lack of government regulation. Since Jane wants to have control and the least interference from government regulations, this form of business is appropriate.

The practice of setting price by increasing the marginal cost of production by some percentage is referred to as: Group of answer choices mark-up pricing percentage pricing rate-of-return pricing average cost pricing

Answers

Answer:

markup pricing.

Explanation:

Markup pricing can be regarded as cost-plus pricing which is pricing strategy that involves addition of cost of the products as well as percentage of the cost of product as a markup to calculate the price of a product/service.the company decides

percentage or markup . It should be noted that The practice of setting price by increasing the marginal cost of production by some percentage is referred to markup pricing.

Cash dividends of $50,000 were declared during the year. Cash dividends payable were $10,000 and $20,000 at the beginning and end of the year, respectively. The amount of cash for the payment of dividends during the year is Group of answer choices $40,000 $50,000 $70,000 $60,000

Answers

Answer:

$40,000

Explanation:

The computation of the amount of cash for the payment of dividends during the year is shown below:

= Beginning dividends payable + Cash dividends Declared - Ending dividends payable

= $10,000 + $50,000 - $20,000

= $40,000

Hence, the amount of cash for the payment of dividends during the year is $40,000

An investment strategy has an expected return of 21 percent and a standard deviation of 15 percent. Assume investment returns are bell shaped. a. How likely is it to earn a return between 6 percent and 36 percent?

Answers

Answer:

68%

Explanation:

Given :

Mean, μ = 21

Standard deviation, σ = 15

Recall :

Zscore = (x - μ) / σ

P(Z =(x - μ) / σ) - P(Z =(x - μ) / σ)

x = 6 and x = 36

P(Z =(36 - 21) / 15) - P(Z =(6 - 21) / 15)

P(Z = 1) - P(Z = - 1)

Using the Z probability calculator :

P(Z = - 1) = 0.15866

P(Z = 1) = 0.84134

0.84134 - 0.15866

= 0.68268

= 0.68

= 68%

The standard deviation for a set of stock returns can be calculated as the: Select one: a. variance squared. b. average squared difference between the actual return and the average return. c. average return divided by N minus one, where N is the number of returns. d. positive square root of the variance. e. positive square root of the average return.

Answers

Answer: d. positive square root of the variance.

Explanation:

Standard deviation is used to show the risk on a set of stocks and it is calculated by taking the square root of the variance of those same returns.

The process of finding the standard deviation is to therefore find the average return first and then find the variance of these returns. At this point, the variance will be positive as it is a squared value. Once this value is then taken to its square root, you will have your standard deviation.

The primary purpose of non-GAAP disclosures is to: Provide investors a set of financial statements and disclosures ahead of GAAP reports included within 10Q and 10Ks. Modify GAAP to provide a more comprehensive detail of income and expense categories. Modify GAAP to better align the reporting of performance with how investors want to see the data. Modify GAAP to make it easier for investors to reconcile GAAP measures of profit to cash flow measures of profit.

Answers

Answer: Modify GAAP to better align the reporting of performance with how investors want to see the data

Explanation:

Non-GAAP disclosure are regarded are used in the measurement of the earnings of a company. Non-GAAP measures are used by companies as a addition to their financial statements to show their core operations to investors.

The primary purpose of non-GAAP disclosures is GAAP to better align the reporting of performance with how investors want to see the data.

Labor power is a special commodity right or wrong?

Answers

Right my mom taught me not to be afraid

Answer:

Right.

Explanation:

The labor market is as much a commodity as the materials are to be processed.

Labor power is a unique commodity in that it is a characteristic of living people who own it in their own bodies. They cannot permanently sell it to someone else because they own it within themselves; otherwise, they would be a slave, and a slave does not own himself.

Describe in one or two paragraphs some steps you can take to make sure that a news article or post is truthful.

Answers

Answer:

     News online is often fake or false, so you must take additional steps to ensure what you're reading is true. First, you should check the url. if it is a .gov or .edu, it it usually a reliable source. .com websites mean it is a commercial website, one that is just trying to earn money or fame. .edu means educational, and .gov means government, both of which are almost always truthful. That's one of the steps you can take to confirm what you're reading isn't a lie.

     You can also check other reliable sorces to see if they say the same thing. If you read an article off a website, Wikipedia being a good example of this, they usually have the sources they used to write said article. Wikipedia always has a list of these at the bottom of their pages. You can check those sources to see if they are reliable, and if they are that increases the validity of the article you read.

Answer:

There are steps you can take to make sure that a news articale or post is truthful. Some examples include the following. Checking reputable websites and media outlets. It is important to check reputable websites and meadia outlets because without checking things how would you know what you are readin is true. The next step you can take to make sure that a news artical or post is truthful is checking the name of a website for red flags. If a website has certain errors you wouldn't normal see nine times out of ten the post or article you are reading is untruthful. Lastly, avoid sharing media messages, which are likely to be fake. You should avoid this because you don't want to be sharing untruthful information without knowing. So, if the website doesn't look truthful then dont share it. Those are some out the many ways you can take to make sure that a news article or post is truthful.

Explanation: My own.

CWN Company uses a job order costing system and last period incurred $70,000 of actual overhead and $100,000 of direct labor. CWN estimates that its overhead next period will be $85,000. It also expects to incur $100,000 of direct labor cost. If CWN bases applied overhead on direct labor cost, its predetermined overhead rate for the next period should be:

Answers

Answer:

85%

Explanation:

With regards to the above information, the predetermined over head is calculated as seen below.

Predetermined overhead = [(Estimated overhead / Expected labor cost) × 100]

Estimated overhead = $85,000

Expected labor cost = $100,000

Then,

Predetermined overhead = [($85,000 / $100,000) × 100]

Predetermined overhead = 0.85 × 100

Predetermined overhead = 85%

Therefore, the predetermined overhead rate for the next period should be 85%

The Okula Corporation has a one-year insurance policy that was purchased for $2,000. Three months have passed since the purchase. The adjusting entry for the insurance policy would include a

Answers

Explanation:

Amount paid for 3 months = 3 month[Total amount / 12 months]

Amount paid for 3 months = 3[2000/12]

Amount paid for 3 months = $500

Books of (..... LTD)

Particular                                   Amount  Amount

Cash               A/c Debit              $500

To Prepaid insurance    A/c                          $500

The price of crude oil rose to over $100 per barrel in early 2013. What would we expect to see happen to the supply of plastic, which is produced using crude oil

Answers

Answer: The supply of plastic will decrease.

Explanation:

Supply simply means the amount of goods and services that a seller is willing to sell at a particular price and a given time period.

It should be noted that one determinant of supply is cost of raw material. Since there's an increase in the price of crude oil which is used in making plastic, there'll be a reduction in the number of plastic that can be produced, therefore, the supply of plastic will reduce.

Dogs R US uses the perpetual inventory system to account for its merchandise. A customer returned merchandise. Assuming that the purchase was originally bought on credit for $400 with a cost to Dogs R US of $100, demonstrate required journal entry of Dogs R US to record the return by selecting all of the correct actions below. (Check all that apply.) Multiple select question. Credit Accounts Receivable $400. Credit Sales Returns and Allowances $400. Debit Accounts Payable $400. Credit Merchandise Inventory $100. Credit Cash $400. Debit Sales Returns and Allowances $400. Credit Cost of Goods Sold $100. Debit Cost of Goods Sold $100. Debit Merchandise Inventory $100.

Answers

Answer:

Credit cost of goods sold $100.

Debit merchandise inventory $100.

Credit accounts receivable $400.

Debit sales returns and allowances $400.

Explanation:

These are the demonstrate required journal entries of Dogs R US to record the return.

Credit cost of goods sold $100.

Debit merchandise inventory $100.

Credit accounts receivable $400.

Debit sales returns and allowances $400.

The Work in Process Inventory account for DG Manufacturing follows. Compute the cost of jobs completed and transferred to Finished Goods Inventory.
Work in Process Inventory
Beginning WIP 5,200
Direct materials 47,800
Direct labor 30,300
Applied Overhead 16,500
Total Manufacturing Costs 99,800
To Finished Goods ?
Ending WIP 10,300
The cost of units transferred to finished goods is:_________

Answers

Answer:

the  cost of units transferred to the finished goods is $89,500

Explanation:

The computation of the cost of units transferred to the finished goods is shown below:

Cost of units transferred to finished goods

= Beginning WIP + Direct materials+ Direct labour + Applied overheads-Ending WIP

= $5,200 + $47,800 + $30,300 + $16,500 - $10,300

= $89,500

Hence, the  cost of units transferred to the finished goods is $89,500

In most countries, contract and temporary employees are much more expensive to lay off than full-time employees.
A. True
B. False

Answers

Answer:

False

Explanation:

Monroe Minerals Company purchased a copper mine for $122,000,000. The mine was expected to produce 50,000 tons of copper over its useful life. During Year 1, the company extracted 6,400 tons of copper. The copper was sold for $4,900 per ton. Assume that the company incurred $8,540,000 in operating expenses during Year 1. Based on this information, how much net income would Monroe report in Year 1?​

Answers

Answer:

Your answer is given below:

Explanation:

Depletion cost per ton

= 122,000,000/50,000 tons = 2,440 per ton

Cost of copper sold = 6,400 tons*2,440 = 15,616,000

Sales = 6,400 tons*4,900 = 31,360,000

Net income = Sales - Cost of copper sold - Operating expenses

= 31,360,000 - 15,616,000 - 8,540,000

= $7,204,000

United Airlines is considering purchase of two alternative planes. Plane A has an expected life of 5 years., will cost $100 million, and will result in net cash flow of $30 million every year. Plane B has a life span of 10 years, will cost $132 million, and will produce net cash flow of $25 million per year. United Airlines plan to serve the route only for 10 years. Inflation in operating costs, airline costs and fares are expected to be zero. The company's cost of capital is 12%. By how much would the value of the company increase if the company accepts the better project ( plane).

Answers

Answer:

United Airlines

The value of the company would increase by $9.25 million if it accepts the better project (Plane B).

Explanation:

a) Data and Calculations:

                                                  Alternative 1      Alternative 2

                                                   Plane A              Plane B

Initial project cost                      $100 million         $132 million

Annual net cash inflow             $30 million           $25 million

Expected lifespan                      5 years                10 years

Cost of capital = 12%

Present value Annuity factor    3.605                   5.650

Present value of cash inflows  $108,150,000       $141,250,000

Net present value =                  $8,150,000           $9,250,000

The better project (plane) is Plane B.

Tại sao nói Marketing vừa là khoa học, vừa là nghệ thuật?

Answers

Answer:

Sorry I can't understand.....

The customs,values,and demographic characteristics of the society in which an organization functions are the principal elements of the political-legal environment.

a. True
b. False

Answers

Answer:

b. False

Explanation:

There are many factors that regulate and affect the proceedings of the business. Environmental factor is one of the factors among them. Internal environment and external environment effects the proceedings of the business. Political, economic, socio-cultural and technological factors are some of the important factors. Political factors comprises of the political decisions taken by the government that can have any form of effect on the business. Socio-cultural environment comprises of the values, beliefs and culture that helping in shaping the working of the business.

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