Below the Break-Even EBIT,the Owners Can Benefit from Financial Leverage

question 14

True/False

Below the break-even EBIT,the owners can benefit from financial leverage.

---

Definitions:

Factor Distribution

The way in which income and wealth are shared among different factors of production, such as labor and capital.

Income

The amount of money or its equivalent received during a period of time in exchange for labor or services, from the sale of goods or property, or as a profit from financial investments.

Derived Demand

The demand for a good or service that arises from the demand for another good or service. For example, the demand for steel is derived from the demand for cars.

Factor Market

A market where factors of production (such as labor, capital, and land) are bought and sold, different from markets for goods and services.