The Degree of Financial Leverage (DFL) Is Defined as the Percentage

question 27

Multiple Choice

The degree of financial leverage (DFL) is defined as the percentage change in _____ that results from a given percentage change in earnings before interest and tax (EBIT) .

• A) sales
• B) net operating income (NOI)
• C) operating fixed costs
• D) net income
• E) earnings per share (EPS)

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Definitions:

Fallacy

A flaw in rational process causing an argument to be invalid.

Authority

The power or right to give orders, make decisions, and enforce obedience.

Subjectivism

The philosophical stance that knowledge and reality are subject to individual interpretation or perception.

Fallacy

An erroneous argument dependent upon an unsound or illogical contention.