In a Highly Leveraged Company

question 33

Multiple Choice

In a highly leveraged company,

• A) fixed costs are low and variable costs are high.
• B) large changes in sales volume result in small changes in net income.
• C) there is a higher possibility of net income or net loss and therefore more risk than a low leveraged firm.
• D) a variation in sales leads to only a small variability in net income.

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Definitions:

Protect

To cover or shield from exposure, injury, damage, or destruction.

Parallel Veins

A vein pattern in plant leaves where the veins run parallel to each other from the base to the tip, common in monocots.

Floral Parts

The components that make up the structure of a flower, including sepals, petals, stamens, and carpels.

Monocot

Refers to a group of flowering plants (angiosperms) that have a single cotyledon, or seed leaf, in the embryo.