Your Employer Uses an Escalator Clause to Determine Your Raise

question 242

True/False

Your employer uses an escalator clause to determine your raise each year. In an inflationary environment, your employer is more likely than you are to want to use the chained CPI for urban consumers as the price index in this clause.

---

Definitions:

DFL

Usually refers to Degree of Financial Leverage, a ratio that measures the sensitivity of a company's earnings per share to fluctuations in its operating income, as affected by changes in its capital structure.

EBIT

Earnings Before Interest and Taxes, an indicator of a company's profitability excluding interest and income tax expenses.

Interest Expense

The cost incurred by an entity for borrowed funds, typically paid to lenders as interest on loans.

Breakeven Analysis

A calculation to determine the point at which revenue received equals the costs associated with receiving the revenue, indicating no net loss or gain.