If Debt Financing Is Used,which of the Following Is Correct

question 75

Multiple Choice

If debt financing is used,which of the following is correct?

• A)The percentage change in sales will be greater than the percentage change in EBIT, which in turn will be greater than the percentage change in net income.
• B)The percentage change in net operating income will be equal to a given percentage change in net income.
• C)The percentage change in net income relative to the percentage change in net operating income will depend on the interest rate charged on debt.
• D)The percentage change in net income will be greater than the percentage change in net operating income.

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Definitions:

Pedal Erythema

Redness or inflammation of the skin on the feet, which can be a sign of infection, inflammation, or circulatory issues.

Lichenification

A skin condition characterized by thickened, leathery patches resulting from excessive scratching or rubbing.

Keratosis

A general term for any skin condition characterized by an overgrowth of keratin, leading to rough, scaly patches.

Fissure

A long, narrow, and deep crack or opening often found in the anatomy of the body, such as the skin or the folds of the brain, that can indicate disease or a division between anatomical structures.