Which Is True of a Net-Change System

question 5

Multiple Choice

Which is true of a net-change system?

• A)It is a batch-type system which is updated periodically.
• B)It is usually run at the beginning of each month.
• C)The production plan is modified to reflect changes as they occur
• D)It is used to authorize the execution of planned orders.
• E)It indicates the amount and timing of future changes.

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Definitions:

Cost of Capital

The rate of return that a company must earn on its project investments to maintain its market value and attract funds.

Debt/Equity Ratio

A fiscal ratio that reflects the comparative amount of equity from shareholders and borrowed funds utilized to support a company's resources.

DFL

Degree of Financial Leverage, a ratio that measures the sensitivity of a company’s earnings per share to fluctuations in its operating income, based on its capital structure.

EBIT

Earnings Before Interest and Taxes, a measure of a firm's profit that includes all incomes and expenses except interest and income tax expenses.