To Employ Leverage,you Should Borrow Funds to Make an Investment

question 47

True/False

To employ leverage,you should borrow funds to make an investment with the goal of earning a rate of return in excess of the after-tax costs of borrowing.

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Definitions:

Opportunity Cost

The sacrifice involved in not picking the subsequent preferable option at the time of decision-making.

Freight Train

A train that is used for transporting goods, cargoes, and commodities rather than passengers.

Producing

The process of creating goods or services that can be sold or used, often involving raw materials, labor, and machinery.

Production Possibility Frontier

A curve depicting all maximum output possibilities for two goods, given a set of inputs.