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Two Firms Which Have the Same Operating Leverage Must Also

question 96

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Two firms which have the same operating leverage must also have the same ROA,since operating leverage and ROA both measure the effective utilization of assets by the firm.


Definitions:

Extra Heart Beat

An additional heartbeat that occurs outside of the normal rhythm, also known as premature contraction.

End-Systolic Volume

The volume of blood in the ventricle of the heart immediately after contraction, before the heart fills again.

End-Diastolic Volume

The volume of blood in the ventricles at the end of diastole, right before the heart contracts.

End-Systolic Volume

The volume of blood left in the ventricle after contraction (systole) and before it begins to fill again.

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