If a Firm's Degree of Total Leverage (DTL)is 8

question 64

Multiple Choice

If a firm's degree of total leverage (DTL) is 8.0,which of the following must be correct?

• A) The firm must have fixed operating costs.
• B) The firm must have fixed financial costs.
• C) The firm must have both fixed operating costs and fixed financial costs.
• D) The firm must have some fixed costs,but not enough information is given to determine whether the fixed costs are operating,financial,or both.
• E) With the information given,we cannot tell whether the firm has any fixed costs (either operating or financial)at all.

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Definitions:

Penfield

A reference to Wilder Penfield, a neurosurgeon whose mapping of the brain significantly advanced the understanding of cerebral functions.

Recognition

The cognitive process of identifying and acknowledging the presence or existence of something previously observed or experienced.

Multiple Choice

A type of question or problem that offers several answers from which one must be selected as the correct or best choice.

Matching

A process in which individuals select partners or objects that are similar to themselves in some specific attributes or characteristics.