Depreciation and Amortization Are Treated Like Fixed Costs

question 44

Multiple Choice

Depreciation and amortization 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:

Shareholders' Equity

The residual interest in the assets of a corporation after deducting liabilities, representing the ownership interest of shareholders.

Outstanding Ordinary Shares

The total number of shares currently held by shareholders, including restricted shares held by company officers and insiders, but not treasury shares.