If an Entity Is Able to Earn More on Borrowings

question 34

Multiple Choice

If an entity is able to earn more on borrowings than the cost of those borrowings the return on equity will:

• A) vary.
• B) increase.
• C) decrease.
• D) be unchanged.

Understand digital marketplaces and the behavior of showrooming.

Recognize the impact of B2B and B2C differences on market complexity and volume.

Grasp the technological foundations of digital currencies and the basics of e-commerce security.

Understand different e-commerce marketplace models and their mechanisms.

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Definitions:

Percentage of Net Sales

A financial ratio that represents certain expenses, liabilities, or profits as a percentage of the net sales, used to analyze the financial health and performance of a business.

Bad Debts

Amounts owed to a company that are considered uncollectible, typically due to the debtor's inability to pay.

Factoring Commissions

Factoring commissions are fees paid to a factor, or financial intermediary, for advancing funds to a business by purchasing its accounts receivable.

Accounts Receivable

Amounts owed to a business by its customers for goods or services delivered or used but not yet paid for.