If Debt Financing Is Used,which of the Following Is Correct

question 77

Multiple Choice

If debt financing is used,which of the following is correct?

• A) The percentage change in net operating income is greater than a given percentage change in net income.
• B) The percentage change in net operating income is equal to a given percentage change in net income.
• C) The percentage change in net operating income depends on the interest rate charged on debt.
• D) The percentage change in net operating income is less than the percentage change in net income.
• E) The degree of operating leverage is greater than 1.

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Definitions:

Strictness Error

A bias in performance appraisal characterized by consistently rating employees more harshly than their performance deserves.

Performance Feedback

The process in which employees receive information and evaluation about their work performance from supervisors, peers, or self-assessment.

Problem-Solving Approach

A problem-solving approach involves a step-by-step process of defining the problem, generating alternative solutions, evaluating and selecting the best solution, and implementing it to address the issue or situation faced.

Raters

Individuals who assess or evaluate performance, often in contexts like performance appraisals in organizations.