The Fixed Costs of a Project Are $16,000

question 400

Multiple Choice

The fixed costs of a project are $16,000. The depreciation expense is $7,800 and the operating cash flow is $12,700. What is the degree of operating leverage for this project?

• A) 1.26
• B) 1.43
• C) 1.79
• D) 2.26
• E) 2.79

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Definitions:

Transaction

This refers to any event or action that changes the financial position or the financial statements of a company.

Posted

The process of recording financial transactions in the ledger accounts as part of the accounting cycle.

Reference Column

A column in financial documentation used to indicate a source document or correlation with another piece of data, aiding in tracking and auditing.

Trial Balance

A trial balance is a bookkeeping report that lists the balances in each of an organization's general ledger accounts, typically used to check the mathematical accuracy of bookkeeping entries.