Question

Describe three ways of leveraging so as to multiply assets in a free-market economy

Describe three ways of leveraging so as to multiply assets in a free-market economy

Homework Answers

Answer #1

Three ways of leveraging where we multiply assets in free market

1) Operational leverage: When the sales of the company increases than there will be a growth in the operating Income of a company.When the company has high operating leverage it is earning high profit which can be used for attaining assets.

2) Financial leverage: The technique to buy assets from borrowing funds is called financial leverage. The company will see how much risk they can take and buy assets. Asset price appreciation and also the asset after tax income are considered and it should be more than the borrowed amount.

3) Combined leverage: Usage both operation and financial leverage is called combined leverage

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Does a “strong” dollar really benefit the US economy? And if so, in what ways? And...
Does a “strong” dollar really benefit the US economy? And if so, in what ways? And in what ways does it harm the US economy?
Distinguish between the three ways to transfer capital in the Economy
Distinguish between the three ways to transfer capital in the Economy
1.Describe the three principle indicators to determine how well the country’s economy is doing. 2.Describe what...
1.Describe the three principle indicators to determine how well the country’s economy is doing. 2.Describe what the concept excess burden means, and how it measures tax inefficiency. 3. Describe the three key elements that result in globalization. 4. Describe the major field of economics called macroeconomics. 5. What are the four types of free market competition? 6. What is the minimum wage law? Provide an example of a minimum wage.
.What are three ways to assess reliability? Specifically, name and describe three ways of administering a...
.What are three ways to assess reliability? Specifically, name and describe three ways of administering a test that would allow a psychologist/educator to assess reliability
what is a free market system, command economy, tradition based and mixed economy in an organized...
what is a free market system, command economy, tradition based and mixed economy in an organized way. give examples as well
Describe three or five ways that hospitals receive their revenues
Describe three or five ways that hospitals receive their revenues
name and briefly describe three ways animal cells communicate
name and briefly describe three ways animal cells communicate
Describe three ways a government might respond to a negative externality.
Describe three ways a government might respond to a negative externality.
1. Who answers the three fundamental economic questions in a: a. Command economy? b. Market Economy?...
1. Who answers the three fundamental economic questions in a: a. Command economy? b. Market Economy? c. Mixed economy? 2. Describe the circular flow of the economy? 3. When dies economic growth occur? Why is productivity important to economic growth? 4. What is the difference between capitalism and communism with private property? 5. Hiw does the profit motive and competition work together to benefit consumers?
Describe three different ways how a copper wire can be made to have the same resistance...
Describe three different ways how a copper wire can be made to have the same resistance as a certain piece of aluminum wire. You cannot change anything about the aluminum wire, but are free to alter the copper wire as needed (but it must remain copper).