Multiple Choice
Which of the following statements regarding operating leverage is correct?
A) All else the same, firms with high operating leverage have higher total fixed costs.
B) It is generally easier to decrease operating leverage than it is to increase it.
C) All else the same, operating leverage will rise as output increases.
D) In order to calculate the degree of operating leverage all that is needed are variable costs and operating cash flows.
E) All else the same, the degree of operating leverage rises as the price per unit is increased.
Correct Answer:
Verified
Correct Answer:
Verified
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