Which One of the Following Statements Is True Concerning Operating

Multiple Choice

Which one of the following statements is true concerning operating leverage?

A) The higher the degree of operating leverage, the greater the impact of forecasting risk.
B) Firms with low operating leverage are said to be capital intensive.
C) The degree of operating leverage is equal to [1 + (OCF/FC) ].
D) The degree of operating leverage is equal to the percent change in quantity divided by the percent change in operating cash flow.
E) Operating leverage increases as the output quantity rises.