The Use of Debt to Attempt to Increase the Return

question 53

Multiple Choice

The use of debt to attempt to increase the return earned on owner's equity is referred to as:

• A)debt financing.
• B)equity manipulation.
• C)leverage.
• D)return on debt.

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Definitions:

First-In First-Out (FIFO)

First-In, First-Out (FIFO) is an inventory management and valuation method where goods produced or acquired first are sold, used, or disposed of first.

Ending Inventory

The total value of all the goods a company has in stock at the end of a financial period, which have not yet been sold or used in production.

Recent Cost

The latest cost incurred for goods or services, reflecting the most up-to-date pricing information.

Inventory

The total amount of goods and materials held by a company with the intent of resale or as part of the production process.