An Improvement or Betterment Is an Expenditure That Is Intended

question 7

True/False

An improvement or betterment is an expenditure that is intended to add to the future benefits from an existing fixed asset.

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Definitions:

Financial Leverage

The use of debt to increase the potential return of an investment.

Operating Leverage

A measure of how sensitive a company's operating income is to changes in revenue, indicating the degree to which fixed costs affect profitability.

Sales Revenue

The total amount of money received by a company from its sales of goods or services before any expenses are subtracted.

DOL

Stands for Degree of Operating Leverage, which measures a company’s sensitivity of operating income to its sales.