Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Statements

Authors: Inc. BarCharts

1st Edition

1423223837, 978-1423223832

More Books

Students also viewed these Finance questions