The process of evaluating a firm\'s operations to determine the minimum volume i

ID: 2719580 • Letter: T

Question

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

Select one:

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

Select one:

a. sales.

b. EBIT.

c. debt ratio.

d. share price.

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

Select one:

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.

1. b. direct analysis of operations

2.b. EBIT

3.a. interest costs exceed dividend payments.

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