Firms with a High Degree of Operating Leverage Are

question 44

Multiple Choice

Firms with a high degree of operating leverage are

• A) easily capable of surviving large changes in sales volume.
• B) usually trading off lower levels of risk for higher profits.
• C) significantly affected by changes in interest rates.
• D) trading off higher fixed costs for lower per-unit variable costs.

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Definitions:

Fixed-term Tenancy

A leasing agreement for a specific period, providing stability for both tenant and landlord but limiting flexibility.

Abandons

The act of giving up a right, property, or interest without attempting to claim or sell it, often involving legal or financial implications.

Mitigate

To make less severe, serious, or painful; to minimize the impact or effect of something.

Quitclaim Deed

A deed that conveys only whatever interest the grantor had in the property and therefore offers the least amount of protection against defects of title.