The process of evaluating firms operations

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Reference no: EM13937160

The process of evaluating a firm's operations to determine the minimum volume it must sell to avoid losing money is referred to as:

a. operating leverage analysis

b. direct analysis of operations

c. breakeven analysis

d. cost, volume, and profit analysis

The degree of financial leverage is measured by relating the percentage change in earnings per share to the percentage change in

a. sales.

b. EBIT.

c. debt ratio.

d. share price.

As the level of debt increases that tax benefits of debt increase until

a. interest costs exceed dividend payments.

b. tax shield benefit exceeds distress costs.

c. raw material costs exceed dividend payments.

d. employee costs exceed interest expense.

Reference no: EM13937160

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