If debt financing is used

Assignment Help Financial Management
Reference no: EM131070920

If debt financing is used, which of the following is correct?

a. The percentage change in net operating income is greater than a given percentage change in net income.

b. The percentage change in net operating income is equal to a given percentage change in net income.

c. The percentage change in net operating income depends on the interest rate on debt.

d. The percentage change in net operating income is less than the percentage change in net income.

e. The degree of operating leverage is greater than 1.

Reference no: EM131070920

Questions Cloud

Recruitment-selection department of large retail company : 1. You're an HR consultant that works in the recruitment and selection department of a large retail company. Your manager has asked you to find and implement a personality test that you will administer to all candidates applying for the sales repr..
What is stock and debt basis after these transactions : Suppose at the beginning of 2015, Jamaal's basis in his S corporation stock is $1,300, and he has a $10,300 debt basis associated with a $10,300 loan he made to the S corporation. In 2015, Jamaal's share of S corporation income is $4,300, and he rece..
Why is the effect on equilibrium output finite : why is the effect on equilibrium output finite? and How do I know that the multiplier is 1/MPS?
Price of specific products in different locations : Sometimes, analysts use the price of specific products in different locations to compare currency valuation and purchasing power. For example, the Big Mac Index compares the purchasing-power parity of many countries based on the price of a Big Mac..
If debt financing is used : If debt financing is used, The percentage change in net operating income is greater than a given percentage change in net income. The percentage change in net operating income is equal to a given percentage change in net income. The percentage change..
Used as the initial cash flow for net working capital : Ultimate Home Appliance Emporium is expanding its product offerings in order to satisfy a wider range of customer tastes and styles. The expansion project includes increasing the floor inventory by $610,000 and increasing its debt to suppliers by 75 ..
Capital structure and degree of leverage analyses : Which of the following are practical difficulties associated with capital structure and degree of leverage analyses?
Factors does not affect a firm''s business risk : Which of the following factors does not affect a firm's business risk?
Report on the benefits of implementing a new health : You have been asked by your health care organization to provide a detailed report on the benefits of implementing a new health information technology system to comply with the current mandates.

Reviews

Write a Review

Financial Management Questions & Answers

  What type of information is needed to properly assess

Are governmental fund financial statements sufficient for users seeking information about budgetary control and operational accountability? If so, why? If not, what type of information is needed to properly assess the effectiveness of the agency’s bu..

  Work patterns in the housekeeping department

Management has studied work patterns in the housekeeping department and estimates the number of hours to be worked as follows. Hours worked = (1,500 hours per month) + (0.50 × RVUs). For the coming month, management expects RVUs to be 5,800. What sho..

  What is current share price-dividends are expected to grow

Synovec Co. is growing quickly. Dividends are expected to grow at a rate of 24 percent for the next three years, with the growth rate falling off to a constant 6 percent thereafter. If the required return is 14 percent, and the company just paid a di..

  What is the present value of the annuity

A 10-year annuity pays $2,150 per month, and payments are made at the end of each month. If the interest rate is 12 percent compounded monthly for the first five years, and 8 percent compounded monthly thereafter, what is the present value of the ann..

  What was its charge for depreciation and amortization

Pearson Brothers recently reported an EBITDA of $10.5 million and net income of $2.1 million. It had $2.0 million of interest expense, and its corporate tax rate was 30%. What was its charge for depreciation and amortization?

  What is the present value of the annuity

A 13-year annuity pays $2,800 per month, and payments are made at the end of each month. The interest rate is 12 percent compounded monthly for the first seven years, and 10 percent compounded monthly thereafter. What is the present value of the annu..

  Current market share for its drat product remains

Assuming Digby’s current market share for its Drat product remains the same, how many units of Drat should Digby expect to sell in the primary segment for the upcoming year?

  Estimate of the stocks current market value

Burke Tires just paid a dividend of D0 = $0.25. Analysts expect the company's dividend to grow by 30% this year, by 10% in Year 2, and at a constant rate of 5% in Year 3 and thereafter. The required return on this low-risk stock is 9.00%. What is the..

  What are some of the government requirements imposed on a

What are some of the government requirements imposed on a public corporation that are not imposed on a private, closely held corporation?

  Required rate of return on the bond rises

Explain how a long term bonds price is impacted in opposite directions when the required rate of return on the bond rises.

  Integer linear programming

Company X has seven pending tasks, each of which takes a given number of days to be finished. The amount of time required for each of the tasks are (in days): 10, 8, 6, 5, 4, 4 and 3. There are three employees that can be assigned to any of the tasks..

  Sale in receivables or the days sales outstanding

A company has net income of $218,000 a profit margin of 8.70% and an accounts receivables balance of $132,850. What is the company’s days sale in receivables or the days sales outstanding?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd