Leverage is the use of fixed costs to magnify returns at high levels of operation.

Name: Leverage is the use of fixed costs to magnify returns at high levels of operation.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Leverage allows a company to use fixed costs (such as debt financing) to increase potential profits at higher levels of operation. This magnification of returns can be beneficial if managed properly, but it also increases the risk of financial losses.

Leverage Is the Use of Fixed Costs to Magnify Returns