Multiple Choice
Which of the following statements is true regarding operating leverage?
A) Companies with high operating leverage will earn lower profits than companies with low operating leverage.
B) Companies with high operating leverage will earn higher profits than companies with low operating leverage.
C) Companies with high operating leverage generally experience fewer profit fluctuations as sales fluctuate than do companies with low operating leverage.
D) Companies with high operating leverage generally experience larger operating profit fluctuations as sales fluctuate than do companies with low operating leverage
E) None of the answer choices is correct.
Correct Answer:
Verified
Correct Answer:
Verified
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