Chapter 10 quiz

Chapter 10 quiz - operating leverage, the breakeven point...

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Question 1 1 out of 1 points In finance, leverage refers to the magnification of operating or financial results due to the presence of fixed costs. Selected Answer: Correct Answer: Question 2 1 out of 1 points Which of the following, if increased, would lead to higher operating leverage for a firm? Selected Answer: Correct Answer: Question 3 1 out of 1 points Which of the following, if increased, would lead to higher financial leverage for a firm? Selected Answer: Correct Answer: Question 4 1 out of 1 points High operating leverage will have very little effect on EBIT.
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Selected Answer: Correct Answer: Question 5 1 out of 1 points On the income statement, the costs directly associated with financial leverage will be accounted for between __________ and __________. Selected Answer: Correct Answer: Question 6 1 out of 1 points In the context of break even analysis with
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Unformatted text preview: operating leverage, the breakeven point is the point where revenues are equal to variable costs. Selected Answer: Correct Answer: Question 7 1 out of 1 points If a firm's Degree of Operating Leverage (DOL) equals 3, then a 1% increase in sales will result in a _____% increase in operating income (EBIT). Selected Answer: Correct Answer: Question 8 1 out of 1 points If a business does well, all else held equal, financial leverage will __________ returns to shareholders. Selected Answer: Correct Answer: Question 9 1 out of 1 points If a firm's Degree of Financial Leverage (DFL) equals 3, then a 1% increase in operating income will result in a _____% increase in earnings per share. Selected Answer: Correct Answer: Question 10 1 out of 1 points When we put DOL and DFL together, we get the degree of combined leverage (or DCL). Selected Answer: Correct Answer:...
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Chapter 10 quiz - operating leverage, the breakeven point...

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