If a Manager Sees a Potential Outlier in the Data

question 2

True/False

If a manager sees a potential outlier in the data, he or she should first determine whether the data is correct.

---

Definitions:

Optimal Level

The most efficient, effective, or desirable amount or degree of something.

Financial Leverage

The use of borrowed money (debt) to amplify the potential return on investment.

Break-even EBIT

The level of earnings before interest and taxes (EBIT) at which a company neither makes a profit nor incurs a loss.

Target Capital Structure

Refers to the mix of debt, preferred stock, and common equity that a company aims to hold to fund its operations and maximize its value.