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11. Financial gearing (leverage) occurs when a business is financed by contributions from borrowings. Which of the following statements is TRUE about financial gearing? A)
11. Financial gearing (leverage) occurs when a business is financed by contributions from borrowings. Which of the following statements is TRUE about financial gearing? A) Gearing reduces the risk to shareholders. B) Gearing involves the company taking loans that are an Internal source of finance. C) Gearing is beneficial to shareholders because interest payments to lenders are tax- deductible. D) Gearing always includes loans that are at very high interest rates. 12. Hansraj and Patel are engaged in providing and marketing a standard advice service. Summarised results for the past two months reveal the following: Sales (in units of service) Total Sales Revenue () Total Costs () Operating Profit () October 200 5,000 (4,000) 1,000 November 300 7,500 (5,300) 2,200 Over the two months, there had been no changes in unit selling prices of services, or in the costs. A) 110 units B) 88 units C) 100 units D) 117 units What is the Break-Even Point (in units of service) for Hansraj and Patel (answer in nearest whole units)
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