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Kat owns and manages a small all-equity firm.If she works 40 hours a week,the firm's annual EBIT will be $38,000.If she increases her hours to 45 a week,EBIT will increase to $43,000.The firm has a current value of $210,000.Kat wants to expand the business and needs $76,000 to do so.The firm can borrow the needed funds at an interest rate of 6.7 percent,or it can issue equity.Ignore taxes.Kat will prefer
Accounts Receivable
Money owed to a business by its customers for goods or services delivered but not yet paid.
Depreciation Expense
An accounting method of allocating the cost of a tangible asset over its useful life, reflecting wear and tear, or obsolescence.
Depreciation Expense
Depreciation expense represents the allocation of the cost of tangible assets over their useful lives.
Decrease in Payable
A reduction in the amount a company owes to its suppliers or creditors, indicating payments have been made.
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