If a Company Has Very Low Operating Leverage (I

Multiple Choice

If a company has very low operating leverage (i.e.,a low proportion of fixed costs in the cost structure) and no changes are expected in operations:

A) percentage change income statement percentages can serve as the basis for projecting operating expenses.
B) using common-size income statement percentages will overstate future projected operating expenses.
C) using common-size income statement percentages will understate future projected operating expenses.
D) using common-size income statement percentages can serve as a reasonable basis for projecting future operating expenses.