The Use of Borrowed Funds to Increase the Return on Owner's

question 98

Multiple Choice

The use of borrowed funds to increase the return on owner's equity is called

• A) financial planning.
• B) investment management.
• C) management leverage.
• D) financial leverage.
• E) return on leverage.

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Definitions:

Absolute Advantage

The capability of a party to produce a greater quantity of a good, product, or service than competitors, using the same amount of resources.

Tractors

Heavy vehicles designed for agricultural use, primarily to mechanize farming tasks including plowing, planting, and harvesting.

Opportunity Cost

Forfeiting possible rewards from various alternatives when a singular option is chosen.

Crude Oil

A natural fossil fuel consisting of hydrocarbon deposits and other organic materials that can be refined to produce various types of energy products.