Which One of the Following Describes Financial Leverage

question 121

Multiple Choice

Which one of the following describes financial leverage?

• A) To pay off all long-term debt in order to reduce interest expense
• B) To finance with equity capital
• C) To offer discounts to customers for early payment of invoices
• D) To earn more income on borrowed money than the related interest expense

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Definitions:

Annual Period

The annual period is a 12-month timeframe used in financial reporting, planning, and evaluation of a company's performance.