Operating leverage x Financial leverage = ________
A. Combined Leverage
B. Financial Combined Leverage
C. Operating Combined Leverage
D. Fixed leverage
Answer: Option A
Solution(By Examveda Team)
The Combined Leverage (CL) is not a distinct type of leverage analysis, rather it is a product of the Operating Leverage and the Financial Leverage. The CL may be defined as the % change in EPS for a given % change in the sales level and may be calculated as follows:Combined Leverage = Operating Leverage x Financial Leverage = % Change in EPS / % Change in sales
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Investment is the _______________.
A. net additions made to the nation’s capital stocks
B. person’s commitment to buy a flat or house
C. employment of funds on assets to earn returns
D. employment of funds on goods and services that are used in production process
Financial Management is mainly concerned with ______________.
A. All aspects of acquiring and utilizing financial resources for firms activities
B. Arrangement of funds
C. Efficient Management of every business
D. Profit maximization
The primary goal of the financial management is ____________.
A. to maximize the return
B. to minimize the risk
C. to maximize the wealth of owners
D. to maximize profit
In his traditional role the finance manager is responsible for ___________.
A. proper utilisation of funds
B. arrangement of financial resources
C. acquiring capital assets of the organization
D. efficient management of capital
The correct answer should be combined leverage as the solution deck suggests combined leverage = operating leverage x financial leverage, but the right answer is given as Operating combined leverage. There seems to be come contradiction.
Answer should be (A)
Combined leverage is a combination of financial leverage and operating leverage. The answer should be A. But here the answer is c.