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3. Which is not a true statement about operating leverage? a. Companies with high operating leverage must cover a larger amount of fixed costs each
3. Which is not a true statement about operating leverage? a. Companies with high operating leverage must cover a larger amount of fixed costs each month regardless of whether they sell any units of product. T b. The higher the operating leverage the higher the break-even. T c. Firms with higher operating leverage must force other companies out of business to the benefit of operating leverage. d. Firms with higher operating leverage need large markets to take full advantage of their leverage. 4. Which is not a true statement about financial leverage? a. The use of financial leverage varies greatly by industry and by the business sector. I b. The use of financial leverage also has value when the assets that are purchased with the debt capital earn more than the cost of the debt that was used to finance them. T c. The use of financial leverage increases profits by using stocks to gain return. F d. Financial leverage has value due to the interest tax shield that is afforded by the U.S. corporate income tax law.T
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