FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Explain the Leverage and the Incremental Cost of Debt with example? 

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Leverage – Leverage is a financial term it means using the debt for their financial needs and sometime the more leverage create liquidity risks because interest on debt would be payable annually without consideration of performance and net profit of the organization.

For example a business organization want to purchase a fixed assets they issue debt to finance their fixed assets.

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