A Direct Relationship Occurs When

question 253

Multiple Choice

A direct relationship occurs when

• A) the two variables being compared change in opposite directions, or when one goes up the other goes down.
• B) a change in one of the variables causes a change in the other variable in any direction.
• C) the two variables being compared change in the same direction, or when one goes up the other also goes up.
• D) the two variables have no identifiable relationship with each other.

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Definitions:

EBIAT

Earnings Before Interest After Taxes, a measure of a company's profitability that excludes interest expenses but includes taxes.

Amortization

The process of spreading out a loan into a series of fixed payments over time, accounting for both principal and interest.

Capital Expenditures

Funds spent by a company to acquire or upgrade physical assets such as equipment or property.

Profits After Tax

The net income a company retains after paying all its taxes.