The Fan Corp

question 52

Multiple Choice

The Fan Corp. in 2016 had revenues of $24,000, variable costs of $12,000, fixed operating costs of $4,000, interest expenses of $2,000, no taxes, and net income = $6,000. The financial leverage effect for this company is

• A) 1.333
• B) 2
• C) 3
• D) 4