Examples of capital-intensive in the following topics:
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- Return on assets gives us an indication of the capital intensity of the company.
- "Capital intensity" is the term for the amount of fixed or real capital present in relation to other factors of production, especially labor.
- The formula for capital intensity is below:
- Capital intensity can be stated quantitatively as the ratio of the total money value of capital equipment to the total potential output.
- In other words, changes in the retention or dividend payout ratios can lead to changes in measured capital intensity.
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- If these assumptions are held to be true, the HO-model suggests that the exports of a capital-abundant country will be from capital-intensive industries, and labor-abundant countries will import such goods, exporting labor intensive goods in return.
- For example, a country where capital and land are abundant but labor is scarce will have comparative advantage in goods that require lots of capital and land, but little labor.
- If capital and land are abundant, their prices will be low.
- Labor intensive goods on the other hand will be very expensive to produce since labor is scarce and its price is high.
- This country produces one good that is labor intensive, clothes, and one that is capital intensive, cars.
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- Leasing is less capital-intensive than purchasing, so if a business has constraints on its capital, it can grow more rapidly by leasing property than by purchasing property.
- Capital assets may fluctuate in value.
- Leasing shifts risks to the lessor, but if the property market has shown steady growth over time, a business that depends on leased property is sacrificing capital gains.
- Depreciation of capital assets has different tax and financial reporting treatment from ordinary business expenses.
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- The contribution of growing capital intensity of IT to growth in labor productivity has been generally rising over time.
- Indeed, during the latter part of the 1990s, it accounted for the bulk of the contribution of rising capital intensity and has clearly played a major role in the growth of Australia's labor productivity.
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- Industry has become more information driven and less labor intensive, leading to a polarization between high- and low-skilled jobs.
- Industry is becoming more information-intensive and less labor and capital-intensive.
- However, there are also important implications for capitalism itself.
- Not only is the value of labor decreased, the value of capital is also diminished.
- In the classical model, investments in human capital and financial capital are important predictors of the performance of a new venture.
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- The United States is an example of a core country -- it has vast amounts of capital and labor is relatively well compensated.
- India is an example of a semi-peripheral country -- it is largely dependent on foreign investors for capital, but has a growing technology industry and emerging middle class consumer market.
- Core countries are capital intensive, have high wages and high technology production patterns and lower amounts of labor exploitation and coercion.
- Peripheral countries (e.g., most African countries and low income countries in South America) are dependent on core countries for capital and are less industrialized and urbanized.
- Core countries own most of the world's capital and technology and have great control over world trade and economic agreements.
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- Issuing new common stock is a time intensive process that gives access to capital with various direct and indirect costs.
- When it comes to the cost of capital, common stock is one of a few options on the table for raising funding.
- In terms of literal capital spent, the issuance of new common stock incurs a variety of capital costs both at the initial offering and throughout the process of managing this funding source over time:
- From a general perspective, the process of offering shares is skill intensive, from management to legal to accounting, firms must hire and maintain a wide pool of talent to maintain this form of equity.
- Weigh the direct and indirect costs of issuing new common stock as a form of capital
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- Recently, industry has become more information-intensive, which has led to higher productivity but also higher unemployment and inequality.
- In general, industry is becoming more information-intensive, less labor-intensive, and less capital-intensive.
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- International businesses often have high capital needs, as global trade can be resource intensive (though it's worth noting that the digital age has changed this significantly for many industries).
- Loans - Bank loans are a form of debt, often with a relatively low cost of capital.
- The startup world is full of interesting options to procure capital, including:
- Venture Capital (VCs) - A popular term in the Silicon Valley and other technology hubs, VCs accumulate capital from a number of speculative investors and seek strong business opportunities still in the startup phase.
- Winning capital from a VC can be quite lucrative, as the amount of capital invested can be high (high enough to justify international operations).
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- (Hart, Stuart, Capitalism at the Crossroads)
- Meanwhile, in Central America, Corporacion Dinant is producing biodiesel from African Palm trees, which have low water needs and require intensive manpower – a situation that provides excellent opportunities for job creation (currently 2,000 small producers are involved in the project).
- Businesses astute and creative enough to adapt to the needs of the world's largest collection of potential customers are currently reaping the benefit of increased profits, improved regional economic stability, and intense personal satisfaction – with little or no competition.
- Krishnan (McGraw-Hill, 2008) and Capitalism at the Crossroads: Aligning Business, the Earth, and Humanity by Stuart Hart (Wharton School Publishing, 2007, 2nd edition).