DFL measures the sensitivity of EPS to changes in EBIT. If only debt is present, DFL = EBIT / (EBIT - I). If preference shares are also present, the formula includes the pre-tax equivalent of preference dividends, making D option correct.
S1: The Purchases Return Book records returns of goods purchased on credit. S2: The Purchases Return Book is also called the Returns Outwards Book. Which statement(s) is/are correct?
Explanation:
The Purchases Return Book records goods returned to suppliers that were originally purchased on credit. It is also known as the Returns Outwards Book because goods are going out of the business. Both statements are correct.
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