Depreciation and Amortisation Are Treated Like Fixed Costs

question 21

Multiple Choice

Depreciation and amortisation are treated like fixed costs

• A) in the calculation of the degree of pretax cash flow operating leverage.
• B) in the calculation of the degree of accounting operating leverage.
• C) for cash flow purposes.
• D) none of the above.

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Definitions:

Independent

Not being influenced or controlled by others; having the freedom to think, act, and make decisions by oneself.

Real GDP

The measure of a country's economic output adjusted for price changes, reflecting the real quantity of goods and services produced.

Spending Multiplier

The ratio of a change in aggregate income to the initial change in spending that brought it about, illustrating the larger impact on income.

Government Purchases

Expenditures made by the public sector on goods and services, including infrastructure and public safety.