--%>
Assignment Help - homework help

Explain the term leverages

Briefly explain the term leverages?

E

Expert

Verified

Leverage is a common word that is employed in financial management and it is employed as a method to multiply the losses and gains. It refers of achievement of more profit on comparative lower level of investment or lesser sales. There are various ways to accomplish leverage the most general of them all is buying the fixed assets, borrowing money and employ of derivatives. Examples of these are illustrated below:-

i) Public corporation might leverage its equity through borrowing money. The more a company borrows less equity capital it wants so the losses and profits are shared between small groups of people.

ii) Business Corporation might leverage its revenue through buying fixed assets. This will get more fixed proportion to the company instead of variable cost as change in revenue will effect in larger change in operating income.

   Related Questions in Business Economics

  • Q : What is the opportunity cost of

    What is the opportunity cost of attending college?  In 2000, nearly 80% of college-educated Americans held jobs, whereas only about 40% of those who did not finish high school held jobs.  How might this difference relate to opportunity costs?

    		•
  • Q : Explain the foundation of economics

    Explain the foundation of economics where society’s material wants are unlimited?

    		•
  • Q : What are the facts of inflation What

    What are the facts of inflation?

    		•
  • Q : Explain the shapes of the

    Specify and explain the shapes of the marginal-benefit and marginal-cost curves and use these curves to determine the optimal allocation of resources to a particular product.  If current output is such that marginal cost exceeds marginal benefit, should more or l

    		•
  • Q : Write short note Economics Write short

    Write short note Economics?

    		•
  • Q : The Economics Of Property And

    There are THREE questions in this assignment. The overall word length for this assignment should be in the range of 2,000-2,500 words. You may incur a penalty if you exceed the upper value. You must state the total number of words

    		•
  • Q : Allocating resources and distribute

    The market system tends to mainly beneficial allocating resources and distributes goods while: (1) the distributions of wealth and resource ownership are extensively perceived as equitable. (2) markets are extremely competitive. (3) goods are rival an

    		•
  • Q : Gains from Exchange- Practice and

    When a world famous concert pianist is as well the world's fastest short order cook, he would most likely gain the most financially through devoting: (i) Full time to frying burgers (ii) Full time to piano practice and concerts. (iii) Half-time cooking and half-time p

    		•
  • Q : Freedom is to some extent illusory

    Illustrate “freedom is to some extent illusory”?

    		•
  • Q : Describe the Euro Describe the Euro?

    Describe the Euro?

    		•