Question 3: [01, 02, 03, 04] [1-mark x 10 = 10 marks] State whether the following statements are true or false. A. Operating leverage explains the firm's ability to pay the amount of debt to the lender. a. B. The firm's ROE and ROA are different, this implies that the firm is Financed entirely with common equity. C. Financial Leverage reflects the amount of fixed operating cost used in the capital structure. D. The financial leverage explains just the negative effect of the debt financing on the shareholders' profit maximization. ( E. Return on asset rises (or decrease) depending on the net profit margin and total asset turnover. F. Within a leveraged corporation, if the ROA was 12 %, then its ROE must be to 12%. G. The additional finance needs of the firm are affecting by retained earnings and net profit margin. ) H. Operating leverage reflects the financial cost used in the capital structure of the firm. a. I. Capital Budgeting is a short-term decision, include huge expenditures of new fixed assets. a. J. The process of going from the present value (PV) to the future value (FV) is called the discounting process