Two Companies Have Identical Assets and Operating Activities

question 78

Multiple Choice

Two companies have identical assets and operating activities.Which of the follow statements is true?

• A) Both companies have the same net income.
• B) The company with more debt will have lower operating income due to interest expense.
• C) The company with more debt will have higher operating income due to leverage.
• D) The company with more debt will have lower net income due to interest expense.

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Definitions:

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A form of play that involves physical activities such as running, tumbling, and play fighting, important for social and physical development.

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A measure of one's capacity to use language effectively, including understanding, using, and interpreting words.

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A developmental stage that typically includes children from about six to twelve years of age, characterized by significant growth in social, cognitive, and physical domains.