Explain the Term Leverage

question 232

Essay

Explain the term leverage. When is it more favorable for firms to use this strategy?

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Definitions:

Salaries

Periodic payments made by employers to employees, usually monthly or biweekly, in return for the performance of work.

Income

The money received, typically on a regular basis, for work or through investments.

Government Assistance

Programs or financial aid provided by the government to individuals, businesses, or other entities in need of support.

Deferred Gratification

The ability to resist the temptation for an immediate reward and wait for a later reward.