When a Firm Has a High Degree of Operating Leverage

Multiple Choice

When a firm has a high degree of operating leverage:

A) Its projected cash flows are known with great certainty.
B) It is highly susceptible to damage created by forecasting errors.
C) Its cash flows remain relatively constant regardless of its sales level.
D) It will have a relatively low level of fixed assets.
E) It will low fixed costs and high variable costs.