A Company Whose Rate of Return on Investments Is Higher

question 110

Multiple Choice

A company whose rate of return on investments is higher than the interest rate on its debt is said to have

• A) unfavorable financial leverage.
• B) a sub-optimal capital structure.
• C) favorable financial leverage.
• D) negative financial leverage.

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Definitions:

Tractor Chassis

The main structural frame of a tractor, to which all other components and systems are attached or supported.

Kingpin

(1) The linkage pin used in a steering knuckle that permits the assembly to pivot, or the tempered steel, coupling pin mounted on a trailer upper coupler that engages with fifth wheel jaws; (2) The lugged pin built into a trailer upper coupler assembly that engages to jaws in a fifth wheel assembly, permitting articulation at the fifth wheel. Forged from middle alloy steels and tempered. In North America, a kingpin is usually welded into the upper coupler; elsewhere, it is more often bolted.

Sliding

The motion where there is continuous contact between a moving object and a surface, often leading to wear or the generation of heat.

Altering Weight

Adjusting the mass distribution in a vehicle or system to change its performance or stability characteristics.