Operating leverage 1. is the result of using debt financing 2. results from use

Question

Operating leverage 1. is the result of using debt financing 2. results from use of fixed instead of variable costs 3. is associated with less risk and more certainty 4. is affected by the demand for the product

The payback period is not concerned with

the cost of an investment

cash inflows

selecting investments

earnings

Variable costs

are greater than total costs

change with the level of output

are greater than fixed costs

are paid after fixed costs

The corporate income tax rates increase as earnings increase.

False

True

Corporate losses

are carried back three years and then carried forward

offset other losses from prior years

are carried forward three years and then carried back

are carried forward to future years

Corporate federal income tax rates

reach a high of 50 percent for earnings over $18,300,000

phase out the benefits of lower tax brackets as corporate income increases

decrease as income increases

are the same for all level of corporate income

Corporate federal income tax rates

reach a high of 50 percent for earnings over $18,300,000

phase out the benefits of lower tax brackets as corporate income increases

decrease as income increases

are the same for all level of corporate income

1.

the cost of an investment

2.

cash inflows

3.

selecting investments

4.

earnings

Variable costs

1.

are greater than total costs

2.

change with the level of output

3.

are greater than fixed costs

4.

are paid after fixed costs

The corporate income tax rates increase as earnings increase.

1.

False

2.

True

Corporate losses

1.

are carried back three years and then carried forward

2.

offset other losses from prior years

3.

are carried forward three years and then carried back

4.

are carried forward to future years

Corporate federal income tax rates

1.

reach a high of 50 percent for earnings over $18,300,000

2.

phase out the benefits of lower tax brackets as corporate income increases

3.

decrease as income increases

4.

are the same for all level of corporate income

Corporate federal income tax rates

1.

reach a high of 50 percent for earnings over $18,300,000

2.

phase out the benefits of lower tax brackets as corporate income increases

3.

decrease as income increases

4.

are the same for all level of corporate income

Explanation / Answer

part 1 Operating leverage Results from use of fixed instead of variable costs part 2 The payback period is not concerned with earnings part3 Variable costs change with the level of output part4 The corporate income tax rates increase as earnings increase. True higher the income it will move to higher tax rate slab

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