Search Header Logo

SIF - measures of leverage

Authored by Quỳnh Ngô

Professional Development, English, Mathematics

1st Grade

Used 1+ times

SIF - measures of leverage
AI

AI Actions

Add similar questions

Adjust reading levels

Convert to real-world scenario

Translate activity

More...

    Content View

    Student View

10 questions

Show all answers

1.

MULTIPLE CHOICE QUESTION

20 sec • 1 pt

A firm's degree of operating leverage (DOL) depends primarily upon its

sales variability.

level of fixed operating costs.

closeness to its operating break-even point.

debt-to-equity ratio.

2.

MULTIPLE CHOICE QUESTION

20 sec • 1 pt

In the context of operating leverage break-even analysis, if selling price per unit rises and all other variables remain constant, the operating break-even point in units will:

fall

rise

stay the same

still be indetermined until interest and preferred dividends paid are known

3.

MULTIPLE CHOICE QUESTION

20 sec • 1 pt

If a firm has a DOL of 5 at Q units, this tell us that:

if sales rise by 5%, EBIT will rise by 5%.
if sales rise by 1%, EBIT will rise by 1%.
if sales rise by 5%, EBIT will fall by 25%.
if sales rise by 1%, EBIT will rise by 5%.

4.

MULTIPLE CHOICE QUESTION

20 sec • 1 pt

A firm's degree of total leverage (DTL) is equal to its degree of operating leverage its degree of financial leverage (DFL).

plus
minus
divided by
multiplied by

5.

MULTIPLE CHOICE QUESTION

20 sec • 1 pt

The further a firm operates above its operating break-even point, the closer its degree of operating leverage (DOL) measure approaches           

minus one
zero
one
infinity

6.

MULTIPLE CHOICE QUESTION

20 sec • 1 pt

EBIT is usually the same thing as

funds provided by operations.
earnings before taxes.
net income.
operating profit.

7.

MULTIPLE CHOICE QUESTION

20 sec • 1 pt

If two companies have identical unit sales volume and operating risk, they are most likely to also have identical:

sales risk
business risk
sensitivity of operating earnings to changes in the number of units produced and sold.
none

Access all questions and much more by creating a free account

Create resources

Host any resource

Get auto-graded reports

Google

Continue with Google

Email

Continue with Email

Classlink

Continue with Classlink

Clever

Continue with Clever

or continue with

Microsoft

Microsoft

Apple

Apple

Others

Others

Already have an account?