Which of the Following Statements Is CORRECT

question 69

Multiple Choice

Which of the following statements is CORRECT?

• A) If two firms differ only in their use of debt-i.e., they have identical assets, sales, operating costs, and tax rates-but one firm has a higher debt ratio, the firm that uses more debt will have a higher profit margin on sales.
• B) If one firm has a higher debt ratio than another, we can be certain that the firm with the higher debt ratio will have the lower TIE ratio, as that ratio depends entirely on the amount of debt a firm uses.
• C) A firm's use of debt will have no effect on its profit margin on sales.
• D) If two firms differ only in their use of debt-i.e., they have identical assets, sales, operating costs, interest rates on their debt, and tax rates-but one firm has a higher debt ratio, the firm that uses more debt will have a lower profit margin on sales.
• E) The debt ratio as it is generally calculated makes an adjustment for the use of assets leased under operating leases, so the debt ratios of firms that lease different percentages of their assets are still comparable.

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Definitions:

Technostress

The stress or discomfort felt by an individual due to the use or adoption of new technologies.

Electronic Performance Monitoring

The use of electronic devices or software to track and analyze the performance and productivity of employees during work hours.

Part-Time Schedules

Employment arrangements allowing employees to work fewer hours than those typically considered full-time, offering flexibility and work-life balance.

Work Design Parameters

Factors and considerations involved in defining how work is organized, divided, and coordinated within an organization, affecting employee performance and satisfaction.