Which of the Following Is True of Leverage

question 36

Multiple Choice

Which of the following is true of leverage?

• A) It refers to the effects that operating and financial fixed costs have on the returns that shareholders earn.
• B) It is associated with risks which are out of the control of managers.
• C) It includes the effect of operating fixed costs on the returns of shareholders and not the financial fixed costs.
• D) It is used to evaluate the profitability associated with various levels of sales.

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Definitions:

Chlorine Atom

A chemical element with symbol Cl and atomic number 17, known for its roles in various chemical reactions and compounds.

Neutrons

Neutral particles found in the nucleus of an atom, contributing to the atom's mass but not its charge.

Protons

Positively charged subatomic particles found in the nucleus of an atom.

Amu

Atomic Mass Unit, a unit of mass used to express atomic and molecular weights, equivalent to one twelfth of the mass of a carbon-12 atom.