If EBIT Equals $200,000 and Interest Equals $40,000, What Is

question 31

Multiple Choice

If EBIT equals $200,000 and interest equals $40,000, what is the degree of financial leverage?

• A) 5.33x
• B) 1.25x
• C) .8125x
• D) 4.33x

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Definitions:

Deviations

Variance from a reference value, typically the average, shown by the deviation in observed figures.

Actual Data Points

The real, observed values or measurements recorded during an experiment or study.

Fitted Values

Predicted values calculated from a statistical model, used to compare against actual values observed in the data.

Simple Linear Regression Model

A statistical method for modeling the relationship between a single independent variable and a dependent variable by fitting a linear equation.