The Three Basic Types of Leverage Are ________

question 74

Multiple Choice

The three basic types of leverage are ________.

• A) operating, production, and financial
• B) operating, production, and total
• C) production, financial, and total
• D) operating, financial, and total

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Definitions:

Net Cash

The total amount of cash and cash equivalents a company possesses after subtracting all its cash outflows from its cash inflows.

Operating Activities

Activities that relate to the primary operations of a company, such as selling, general, and administrative activities, as well as the production of goods and services.

Free Cash Flow

The amount of cash a company generates after accounting for capital expenditures needed to maintain or expand the asset base.

Net Income

The total profit or loss of a company after all expenses, including taxes and interest, have been subtracted from revenue.