In the Context of Financial Controls, Which of the Following

question 130

Multiple Choice

In the context of financial controls, which of the following best describes leverage?

• A) It is the ability to operate at minimum cost.
• B) It is the ability to earn revenues greater than costs.
• C) It is the ability to earn more in returns than the cost of debt.
• D) It is the ability to meet short-term obligations.
• E) It is the ability to generate cash to pay bills.

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Definitions:

Mechanics

The branch of physics that deals with the behavior of physical bodies when subjected to forces or displacements and the subsequent effects of the bodies on their environment.

Profit

The financial gain made in a transaction or through business operations after subtracting all expenses.

Marginal Revenue Product

The extra income produced through the use of an additional unit of a resource, like labor or capital.

Wage Rate

The amount of compensation or payment in terms of money received by an employee from an employer in exchange for work or services.