A Promissory Note Is an Instrument That Involves Three Parties

question 63

True/False

A promissory note is an instrument that involves three parties in three capacities.

---

Definitions:

Degree of Operating Leverage

A financial ratio that measures how sensitive a company's operating income is to changes in revenue, indicating risk level.

Variable Expenses

Costs that vary in total in direct proportion to changes in an activity level or volume, such as materials and labor costs.

Fixed Expenses

Expenses that remain constant regardless of the amount of goods produced or sold, including items like rent, salaries, and insurance costs.

Unit Sales

The measurement of the number of individual items or units sold by a company.