Figure 3-11

question 197

Multiple Choice

Figure 3-11.The following four months of data were collected on utility cost and the number of labor hours in a factory.
-Refer to Figure 3-11. What would be the estimate of electricity cost if the factory incurred 4,700 labor hours next month?

• A) $9,400
• B) $20,260
• C) $23,140
• D) $19,560

---

Definitions:

ROE

Return On Equity represents a financial performance metric that is obtained by dividing a company's net income by its shareholders' equity, demonstrating the company's effectiveness in using investor funds to grow earnings.

EPS

Earnings Per Share, a key indicator of a company's profitability, calculated by dividing the company's net income by its total number of outstanding shares.

DFL

Degree of Financial Leverage, a ratio measuring the sensitivity of a company's earnings per share to fluctuations in its operating income, due to changes in its capital structure.

Optimal Capital Structure

The most favorable blend of debt and equity financing that minimizes a company's cost of capital while maximizing its market value.