Why is it financially unhealthy for an individual to maintain a large percentage of debt financing over

Question:

Why is it financially unhealthy for an individual to maintain a large percentage of debt financing over a long time, that is, to be highly leveraged?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Engineering economy

ISBN: 978-0073376301

7th Edition

Authors: Leland Blank, Anthony Tarquin

See More Books

Question Posted: Dec 17, 2012 06:05 AM

See More Questions

A high unemployment rate tells us a large percentage of the labour force is unemployed, but it doesnt tell us why the unemployment rate is high. What measure of unemployment tells us if (i) people...
Is it possible for an individual to save and invest in a corporation without lending money to it or purchasing additional shares? Explain
Is it ethical for an individual to purchase numerous items on credit when he or she knows that bankruptcy is available as an option in the event of a default?
You have been asked, as a consultant, by the chief compliance officer of a multi-facility health system to assist in evaluating the organizations current enterprise-wide coding compliance plan for...
Verify the equalities (14.47) for electron-repulsion integrals. tuirs utirs
Is the approach to theory in qualitative research inductive or deductive?
2. The direction of intercompany sales (upstream or downstream) does not affect consolidation workpaper procedures when the intercompany sales between affiliates are made: a At fair value b Above...
The Goodman Company acquired a truck from the Harmes Company in exchange for a machine. The machine cost $30,000, has a book value of $6,000, and has a market value of $9,000. The truck has a cost of...
You want to save up enough money to have $1,000,000 in 20 years by putting aside a fixed amount from your pay cheque at the end of each month. If you expect to earn 8% compounded monthly, how much...
The management of Pratt Engineering Company had agreed in principle to a proposal from Hardin Tool Company to acquire all its stock in exchange for Hardin securities. The two managements were in...
The engineering manager at FXO Plastics wants to complete an alternative evaluation study. She asked the finance manager for the corporate MARR. The finance manager gave her some data on the project...
In a leveraged buyout of one company by another, the purchasing company usually obtains borrowed money and inserts as little of its own equity as possible into the purchase. Explain some...
Dorpac Corporation has a dividend yield of 1.7%. Dorpacs equity cost of capital is 8.4%, and its dividends are expected to grow at a constant rate. a. What is the expected growth rate of Dorpacs...
1. How can the use of MRP contribute to profitability? 2. What are some of the unforeseen costs of ERP implementation? Discuss.
The COVID-19 pandemic resulted in strains on the healthcare supply chain. Discuss why supply chain management (SCM) is important to healthcare organizations. Furthermore, explain how healthcare...
Financial reporting quality relates to the quality of the information regarding the financial wellbeing of a firm that is contained in financial reports, including note disclosures. The quality of...
Exercises: Situational questions. Each answer must be supported by a legal basis. 1. What is the difference when an employee was dismissed for just cause than he was dismissed for an authorized...
In international trade, what is the difference between a contracted agent in a foreign country and a contracted distributor?What are some of the key issues that can arise in the relationship between...
Interpreting disclosures regarding property, plant, and equipment. PepsiCo reports the following information in its financial statements and notes in a recent year (amounts in millions): a. Give the...
What is the expected payoff of an investment that yields $5,000 with a probability of 0.15 and $500 with a probability of 0.85? Select one: O a. $325 O b. $5,500 O c. $2,750 O d. $1,175
Perform matrix multiplications discussed in Sect. 10.6.1 using non-square matrices.
In comparing the alternatives on a present worth basis, the PW of machine X is closest to: (a) $23,160 (b) $40,560 (c) $58,950 (d) $72,432 Problem is based on the following cash flows for...
The initial cost of a packed-bed degassing reactor for removing trihalomethanes from potable water is $84,000. The annual operating cost for power, site maintenance, etc. is $13,000. If the salvage...
In comparing the alternatives on a future worth basis, the FW of machine X is closest to: (a) $23,160 (b) $40,560 (c) $58,950 (d) $71,860 Problem is based on the following cash flows for alternatives...
Present Value Computations Using the present value tables, solve the following. ( Click here to access the PV and FV tables to use with this problem. ) Round your answers to two decimal places....
A company provided the following data: Sales $887,000 Variable costs $546,800 Fixed costs $310,000 Expected production and sales in units 36,000 What is the break-even point in sales dollars? Please...
How to solve them..equation and explain ..please.. 1. Selected information from the companys financial records is presented below Equipment, December 31, 2013 $300,000 Equipment, December 31, 2014...

Why is it financially unhealthy for an individual to maintain a large percentage of debt financing over

Question:

Step by Step Answer:

A large DE mix over time is not healthy financially because this indicates th...View the full answer

Engineering economy

Students also viewed these Economics questions