If a Firm's Sales Decrease by 15%, and Profits Decrease

question 22

Multiple Choice

If a firm's sales decrease by 15%, and profits decrease by 20% during a recession, the firm's operating leverage is

• A) 1.33.
• B) 0.75.
• C) 5.
• D) −5.

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Definitions:

United States

A federal republic in North America comprised of 50 states, a federal district, five major self-governing territories, and various possessions.

Senator Albert Beveridge

An American historian and U.S. senator from Indiana, known for his support of American imperialism and expansionism in the early 20th century.

Imperial Expansion

The process by which a state extends its power and dominion, often through the acquisition of territories, usually via colonization or military conquest.

American

Pertaining to the United States of America or its inhabitants.