Answer the following statements true (T) or false (F)
1. Linear break-even analysis assumes that the change in costs have the same relationship with the change in volume.
2. Linear break-even analysis and operating leverage are only valid within a relevant range of unit production.
3. Financial leverage primarily affects the asset side of the balance sheet.
4. Operating leverage primarily affects the asset side of the balance sheet, while financial leverage affects the liabilities and net worth side of the balance sheet.
5. The degree of financial leverage measures the percentage change in earnings per share (EPS) for every percentage change in earnings before interest and taxes (EBIT).
1. TRUE
2. TRUE
3. FALSE
4. TRUE
5. TRUE
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Common shareholders have a residual claim on all income after creditors and preferred shareholders receive amounts contractually owed them
Indicate whether the statement is true or false
On January 1, 20x3, Fallon Company, a manufacturer of consumer products, had a balance in direct materials inventory of $100,000 . During the year, an additional $400,000 of direct materials were purchased. Also during 20x3, direct materials worth $450,000 were transferred to work-in-process inventory. What was Fallon Company's ending direct materials inventory at December 31, 20x3?
a. $15,000 b. $25,000 c. $50,000 d. $100,000 e. $0
Ongoing studies are made available to many clients for a fee by _____
a. commercial research houses b. the U.S. government (federal) c. channel members d. the Business Periodicals Index
Chandra constantly cooked strong smelling curries in her condominium but her neighbours complained of the strong smell and wanted to force her to move out. If Chandra took her case to a human rights tribunal it would most likely rule that
A) her cooking is a nuisance and she can be forced to leave B) this is discrimination and she has a right to prepare her ethnic food without the threat of removal C) she can stay but she must pay the legal costs of the condominium board D) she can only cook mild curries E) this is not harassment and she will be forced to move if she continues to cook the curries