If a ﬁrm's ﬁxed costs are exactly equal to its depreciation expense, and both are greater than zero, then at its ﬁnancial break-even point the DOL ____________. (Assume that the project has
Conventional cash ﬂows, no salvage value, and no net working capital investments.)
A) Is less than two.
B) Is equal to two.
C) Is greater than two.
D) Is undeﬁned since you can't divide by zero.
E) Cannot be determined without more information.

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The Answer of If a ﬁrm's ﬁxed costs are exactly equal to its depreciation expense, and both are greater than zero, then at its ﬁnancial break-even point the DOL ____________. (Assume that the project has
Conventional cash ﬂows, no salvage value, and no net working capital investments.)
A) Is less than two.
B) Is equal to two.
C) Is greater than two.
D) Is undeﬁned since you can't divide by zero.
E) Cannot be determined without more information.

If a ﬁRm's ﬁXed Costs Are Exactly Equal to Its