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.

---

Definitions:

Moral Character

The existence or display of virtues and ethical traits that are part of a person's nature and actions.

Right Reason

The appropriate or justified rationale that aligns with logical, ethical, or moral correctness, guiding decisions or actions.

Right

Entitlements or freedoms that individuals are allowed by law or moral principles.

Emmanuel Kant

A German philosopher who profoundly influenced modern philosophy with his works on ethics, aesthetics, and epistemology, particularly known for his theory of the moral imperative.