FINANCIAL LEVERAGE Definition

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FINANCIAL LEVERAGE is the use of debt to increase the expected return on equity. Financial leverage is measured by the ratio of debt to debt plus equity.

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IDLE TIME is unproductive time caused by, e.g., machine breakdowns, shortages of material or inefficient scheduling. The cost of idle time is usually classified as an indirect rather than a direct cost.

AVERAGE COST is total cost for all units bought (or produced) divided by the number of units.

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