A Desired Outcome of Setting Objectives in the Planning Process

question 51

True/False

A desired outcome of setting objectives in the planning process is to create criteria for assessing alternative business options.

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Definitions:

EPS

Earnings Per Share, a company's profit divided by its number of outstanding shares of common stock, indicating how much money each share earns.

EBIT

The measure known as Earnings Before Interest and Taxes determines a company's profit levels by excluding interest and tax-related expenses.

Financial Leverage

The use of borrowed funds with the intent to increase the return on equity.

EBIT-EPS Lines

Graphical representations that show the impact of financing choices, especially debt and equity, on a company's earnings per share (EPS) for various levels of earnings before interest and taxes (EBIT).