True or false and Why If debt financing is used the percenta

True or false and Why?

If debt financing is used, the percentage change in net income will by greater than the percentage change in net operating income?

Solution

If debt financing is used, the percentage change in net income will by greater than the percentage change in net operating income?

statement is true

Financial Leverage will impact the amount of interest expenses, that impacting net income. Interest expense is not part of the net operating income of interest expenses, that impacting net income