Which of the Following Is a Key Benefit of Using

question 14

Multiple Choice

Which of the following is a key benefit of using the degree of leverage concept in financial analysis?

• A)It allows decision makers a relatively clear assessment of the consequences of alternative actions.
• B)It establishes the optimal capital structure for the firm.
• C)It shows how a given change in leverage will affect sales.
• D)It identifies, with certainty, the future net income based upon sales projections about the future.
• E)None of the above statements is correct.

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Definitions:

Time Frames

Specific periods during which activities, processes, or events are intended to happen or be completed.

Work Unit Performance

The effectiveness and efficiency of a group or team in achieving its assigned tasks and goals within an organization.

Functional Managers

Responsible for one area of activity, such as finance, marketing, production, human resources, accounting or sales.

Organisational Goals

The stated aims or objectives that a company or an institution seeks to achieve, guiding its operations and strategic planning.