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Does the increase in the financial leverage multiplier result in an increase in the net profit margin and return on investment due to the increase in interest expense as debt increases?
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What is the increase in the value of a investment?
basically it is the increase in the value of an investment.
What does diminishing profit mean?
Diminishing profit means, Additional increase in something such asprofits or benefits that does rise in proportion to the addditional effort or investment necessary to produce them, that is increases not proportional to addition investment.
What is a wealth maximisation?
Wealth maximization is a financial investment management tool that helps businesses increase profits and net worth. In addition, company shareholders are able to receive a higher return from their investment.
An increase in the aggregate price level will increase?
a clause in a contarct that automatically increases wages to account for increases in the price level
What is the difference between investment and net investment?
"Net investment" deducts depreciation from gross investment. Net fixed investment is the value of the net increase in the capital stock per year.
Advantages or importance of multiplier effect?
Concept of multiplier is important form the theoretical as well as practical point of view. For this reason, the importance of multiplier in business and economic sector. The importance of the multiplier can be explained as follows: 1. Importance in investment Multiplier theory has taken investment as the important factor of the economy. The proportionate increase in the level of income and employment in the economy depends up on the multiplier. This clarifies that increase in income and employment is on the basis of increase in investment. 2. Analysis of trade cycle It is easier to analyses trade cycle on the basis of multiplier. Multiplier helps in estimating the increase in income as a result of increase in investment. So, multiplier will be of great importance in formulating progressive policies to bring the effects in the economy to right speed. 3. Formulation of economic policy The main objective of every economic policy is to create the situation of full employment in the economic. Therefore policy makers will formulate their country's economic policy using the multiplier. This will help in creating the situation of full employment. 4. Public investment Public investment is of great importance specially in the situation of depression and unemployment, because this does not stress much on profits. Multiplier indicates the importance of public investment in increasing the level of employment. 5. Equality between saving and investment The equality between saving and investment can be brought about with the help of multiplier. Increase in investment increases the income. Increase in income will bring about equality in saving and investment.
Why investment increases?
increase in investment will expand the productive capacity of the economy
Why the government spending multiplier is different form the tax multiplier?
The government spending multiplier is different form the tax multiplier from the top of my head is because the government spending total effect ripples off. That is if government spending increase then the total income increases. When total income increase, consumption increases, when consumption increases total income increases further (as consumption is a factor of total income), and this pattern is carried forward. This is the the multiplier effect, such that an increase in government spending's final impact on income is much bigger than its initial increase. The tax multiplier on the other hand, has a much smaller effect than government spending. This is because tax is only a portion of the consumer income. That is, if there is a tax cut, consumers only save a fractional amount (specifically 1-MPC) of a tax cut. As a result of the smaller boost in spending form ma tax cut, the ripples/multiplier effect of a tax cut is much less than an increase in government spending.
What is a multipliers?
A multiplier which deals with financial matters 1/1-mpc
When owners invest money in their business the effect on the accounting equation is that the investment increases what?
increase assets and increase owners equity
If An investment by a company's owner increases a company's cash would it increase owners equity?
yes
What happens with the multiplier when MPS increase?
what happen with the multiplier when mps increse
Who is Financial Consultants?
Financial Consultants is the person who give financial freedom to the clients means analyze the current financial situation of the person and according to that give financial strategies to the clients. Give Investment Guidance and allocate their Funds into different segment of the investment scheme to increase the wealth of HNI.
What is the decimal multiplier to increase by 58%?
1.58
What is financial development?
Financial development is an increase in money and resources over time. This increases the ability to acquire and use money through knowledge and experience.
What happens when a nation's currency depreciates?
Exports increase. Imports decrease. FDI increases. Foreign capital investment increases. Economic growth rises. Besides these positives there is the negative effect and thats inflation which increases.
What happens when a nation's currency depreciate?
Exports increase. Imports decrease. FDI increases. Foreign capital investment increases. Economic growth rises. Besides these positives there is the negative effect and thats inflation which increases.
