A Highly Geared Business Is More Susceptible to Changes in Interest

question 5

True/False

A highly geared business is more susceptible to changes in interest rates.

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Definitions:

Assets

Resources owned by a company that have economic value and are expected to provide future benefits.

Rent Expense

The cost incurred by a business for leasing a property or equipment for operational purposes.

Income Summary

An account used in the closing process that summarizes the results of all revenue and expense accounts.

Capital

The wealth, whether in money or other assets, owned or employed in business by an individual, firm, or corporation.