1451. Relationship between change in sales and change M is measured by _________.

A. Financial leverage
B. Combined leverage *
C. Operating leverage
D. None of the above

1452. Operating leverage works when ________?

A. Sales increases
B. Sales decreases
C. Both A and B *
D. None of A and B

1453. Which of the following is correct ?


1454. If the fixed cost of production is zero, Which one of the following is correct ?

A. OL is zero
B. FL is zero
C. CL is zero
D. None of the above *

1455. If a firm has no debt, which one is correct ?

A. OL is one
B. FL is one *
C. OL is zero
D. FL is zero

1456. If a company issues new share capital to redeem debentures, then _____.

A. OL will increase
B. FL will increase
C. OL will decrease
D. Fl will decrease *

1457. If a firm has a DOL of 2.8, It means _______.

A. If sales increase by 2.8% the EBIT will increase by 1%
B. If EBIT increase by 2.896 ,The EPS will increase by 1%
C. If sales rise by 1% ,EBIT will rise by 2.8% *
D. None of the above

1458. Higher OL is related to the use of higher______.

A. Debt
B. Equity
C. Fixed cost *
D. Variable cost

1459. High FL is related the use of ___________.

A. Higher equity
B. Higher debt *
C. Lower debt
D. None of the above

1460. In order to calculate EPS, profit after tax and preference dividend by____________.

A. MP of equity shares
B. Number of equity shares *
C. Face value of equity shares
D. None of the above