When the company earns more on the assets purchased with the funds then the fixed cost of their use such effect is called?
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its called profit of the branch .........
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When the company earns more on assets purchased with funds than fixed cost of their use such effect is called profit of branch (leverage).
Explanation:
Leverage involves the employment of fixed assets or funds to provide greater returns to equity shareholders. In general, there are 3 types of leverage operating leverage, financial leverage, and combined leverage. Practically, there are three types of costs involved in firm namely, the variable cost, fixed cost, and semi-variable or semi-fixed costs.
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