Frontier Corp

question 47

Multiple Choice

Frontier Corp.has a contribution margin of $450,000 and profit of $150,000.What is its degree of operating leverage?

• A)0.33
• B)1.67
• C)2.50
• D)3.00

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Definitions:

Percentage Sales Approach

A financial planning approach that forecasts future financial statements based on the expected percentage change in sales.

Finance Perspective

An approach or viewpoint emphasizing financial metrics and outcomes in decision-making processes or analysis.

Sustainable Growth Rate

The maximum rate at which a company can grow its revenues and earnings without needing to increase financial leverage.

Assumptions

Premises or conditions accepted as true or certain without proof for the purpose of further analysis or argument.