Which Statement Is Not Correct About Financial Leverage for a $300,000

question 51

Multiple Choice

Which statement is not correct about financial leverage for a $300,000 investment versus a $100,000 investment?

• A)The probability of success is the same under both investment options.
• B)The payout will be 3 times higher or 3 times lower with the larger investment.
• C)The probability of success is 3 times greater with the larger investment.
• D)The larger investment increases the return on equity but also faces a greater potential for loss.

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Definitions:

Capital Equipment

Long-term, significant items of property used in the production of goods or services, such as machinery and buildings.

Labor Force

The total number of people employed or seeking employment in a particular region or economy.

Manufacturing And Operations

The processes involved in the production of goods and the management of those processes, aiming at efficiency and quality.

Skilled Workers

Employees who have specialized training, knowledge, and abilities in their field, often requiring formal education or certification.