The use of fixed assets,rather than financial assets,in order to increase the operating earnings is known as:

Question

Quizplus · Accepted Answer

The use of fixed assets in order to increase operating earnings is known as operating leverage. Financial leverage involves the use of debt and other financial instruments to increase earnings. Plant and equipment investment refers to the purchase of fixed assets for future use. Nondeposit capital is a term used in banking to refer to sources of funding that are not traditional deposits, such as bonds or equity. None of these options accurately describe the use of fixed assets to increase operating earnings, making choice C the best answer.

The Use of Fixed Assets,rather Than Financial Assets,in Order to Increase