1) If a firm's fixed financial costs increase, the firm's operating breakeven point will ________.

A) remain unchanged.

B) change based on the sale price per unit.

C) change based on the variable costs per unit.

D) decrease

E) increase

2) According to the domestic Fisher effect, if the inflation rate is 4.5% and the real rate of interest is 2.5%, the nominal rate of interest will be ______

A) 5%

B) 7.11%

C) 5.06%

D) 6.00%

E) 8.15%

3) _________ is the potential use of fixed costs to magnity the effect of changes in sales on the firm's earnings per share.

A) Financial leverage

B) Operating leverage

C) Fixed cost leverage

D) Investing leverage

E) Total leverage