Difference between revisions of "Leverage"
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According to [[Macroeconomics by Mankiw (7th edition)]], | According to [[Macroeconomics by Mankiw (7th edition)]], | ||
:[[Leverage]]. The use of borrowed money to supplement existing funds for purposes of investment. | :[[Leverage]]. The use of borrowed money to supplement existing funds for purposes of investment. | ||
| + | According to [[Managerial Accounting by Braun, Tietz (5th edition)]], | ||
| + | :[[Leverage]]. Earning more income on borrowed money than the related interest expense, thereby mcreasing the earnings for the owners of the business; also called trading on equity. | ||
| − | [[Category: Economics]][[Category: Articles]] | + | [[Category: Economics]][[Category: Articles]][[Category: Accounting]] |
Revision as of 11:55, 15 July 2020
Leverage is the use of borrowed money to supplement existing funds for purposes of investment.
Definition
According to Macroeconomics by Mankiw (7th edition),
- Leverage. The use of borrowed money to supplement existing funds for purposes of investment.
According to Managerial Accounting by Braun, Tietz (5th edition),
- Leverage. Earning more income on borrowed money than the related interest expense, thereby mcreasing the earnings for the owners of the business; also called trading on equity.
