Which of the Following Factors Favors the Use of More

question 93

Multiple Choice

Which of the following factors favors the use of more debt in a company's financial structure?

• A) High levels of taxable income
• B) Low levels of taxable income
• C) The business is basically risky with unpredictable cash flows.
• D) Risk of bankruptcy would make customers reluctant to buy the company's products.

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Definitions:

Marginal Product

The additional output gained from employing one more unit of a certain input, keeping all other inputs constant.

Labor Productivity

The measure of economic performance calculated by dividing the output by the number of labor hours used to produce it.

Technological Advance

The process of developing and applying new techniques and tools to improve efficiency, productivity, or quality in various fields.