Once a Knowledge Asset (E

question 93

True/False

Once a knowledge asset (e.g.,a software code)is developed and paid for,it can be used many times at very low cost as long as it does not have to be substantially modified each time.

---

Definitions:

Net Present Value

The calculation that compares the value of money today to the value of that same money in the future, taking inflation and returns into account.

Degree of Operating Leverage

A financial ratio that measures the impact of fixed costs on the profitability of a company, indicating how earnings before interest and taxes (EBIT) change with sales volume.

Degree of Operating Leverage

A financial ratio that measures the sensitivity of a company's operating income to its sales, indicating the percentage change in operating income for a one percent change in sales.

Total Revenue

The total amount of income generated by the sale of goods or services related to the company's primary operations.