Firm a Employs a High Degree of Operating Leverage; Firm

Multiple Choice

Firm A employs a high degree of operating leverage; Firm B takes a more conservative approach. Which of the following comparative statements about firms A and B is true?

A) A has a lower break-even point than B, but A's profit grows faster after the breakeven.
B) A has a higher break-even point than B, but A's profit grows slower after the breakeven.
C) B has a lower break-even point than A, but A's profit grows faster after the breakeven.
D) B has a lower break-even point than A, and profit grows the same rate for both companies after the break-even point.