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Fictional Corp Has Decided to Migrate Much of Its On-Premises

question 3

Multiple Choice

Fictional Corp has decided to migrate much of its on-premises data center to a cloud service provider to take advantage of some of the benefits of cloud computing. The benefit that they found the most important was the ability to expand and grow (or shrink) as needed without any delay due to shipping and installing the hardware required for an on-premises data center. Which of the following common cloud terms was the most important factor in their decision?

Definitions:

Interest Tax Shield

A deduction that companies can take from their taxable income for the interest payments they have made on their debt, effectively reducing their taxable income.

Bankruptcy Cost

The expenses and financial losses associated with going through bankruptcy, including legal fees, lost business, and detrimental effects on creditworthiness.

Interest Tax Shield

A lowered income tax obligation stemming from approved deductions on interest expenses.

Levered Firm

A company that uses debt (loans or bonds) in addition to equity in its financing structure, often leading to higher risk and potentially higher returns.