What Is An Example Of Capital Deepening? An increase in capital per hour (or capital deepening) leads to an increase in labor productivity. For example, consider factory workers in a motor vehicle plant. If workers have increased access to machinery and tools to build vehicles, they can produce more vehicles in the same amount of
What 3 Things Would Make The PPC Curve Shift Outward? Investment in capital i.e. plant and machinery and new technology. Inward migration of younger, skilled workers. Discovery of new natural resources. Improved education, training and healthcare to lift labour productivity. What 3 things can shift the production possibilities curve? Shifts in the production possibilities curve
Does WACC Increase With Debt? Therefore, the cost of equity and the cost of debt will increase, WACC will increase and the share price reduces. It is interesting to note that shareholders suffer a higher degree of bankruptcy risk as they come last in the creditors’ hierarchy on liquidation. Does increasing debt lower WACC? Since
How Does Working Capital Affect Purchase Price? The working capital peg is generally one of the key considerations in purchase price adjustments. … If the closing net working capital is lower than the peg, the buyer may pay a lower amount, dollar-for-dollar, which effectively decreases the purchase price. What happens when working capital increases? It’s