Which one of the following statements is correct: O a. At periods of economic downturn, companies with low margin of safety tend to be in a relatively weaker position compared to companies with low margin of safety. O b. At breakeven point, the margin of safety is negative Oc. Atagiven point of sales, for companies that have low proportion of fixed costs in their capital structure, the margin of safety is lower compared to companies that have lower fixed costs in their cost structure. O d. All of the given statements are false O e. Anincrease in the number of units sold would decrease the margin of safety
Which one of the following statements is correct: O a. At periods of economic downturn, companies with low margin of safety tend to be in a relatively weaker position compared to companies with low margin of safety. O b. At breakeven point, the margin of safety is negative Oc. Atagiven point of sales, for companies that have low proportion of fixed costs in their capital structure, the margin of safety is lower compared to companies that have lower fixed costs in their cost structure. O d. All of the given statements are false O e. Anincrease in the number of units sold would decrease the margin of safety
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Which one of the following statements is correct:
O a. At periods of economic downturn, companies with low margin of safety tend to be in a relatively weaker position compared
to companies with low margin of safety.
O b. At breakeven point, the margin of safety is negative
Oc. At a given point of sales, for companies that have low proportion of fixed costs in their capital structure, the margin of safety
is lower compared to companies that have lower fixed costs in their cost structure.
O d. All of the given statements are false
O e. Anincrease in the number of units sold would decrease the margin of safety
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