Financial Leverage May Be Defined as the Potential Use of Variable

question 5

True/False

Financial leverage may be defined as the potential use of variable financial costs to magnify the effects of changes in earnings before interest and taxes (EBIT) on the firm's earnings per share (EPS).

---

Definitions:

Supplemental Nutrition

Assistance provided to individuals and families to afford nutritionally adequate diets, often through government programs.

Administrative Costs

Expenses associated with the general operation of a business, including costs related to management, legal services, and office supplies, that do not directly contribute to production.

Assistance Program

A government or private program designed to provide financial or other support to individuals or groups in need.

Earned Income

Money received for work performed such as wages, salaries, or professional fees.