A 10% Change in a Firm's Revenues Is Likely to Result

question 75

Multiple Choice

A 10% change in a firm's revenues is likely to result in a change of more than 10% in the firm's operating income because:

• A)not all of the firm's costs will change in proportion to the revenue change.
• B)the firm has financial leverage.
• C)the contribution margin ratio will change in proportion to the revenue change.
• D)only fixed expenses will change in proportion to the revenue change.

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Definitions:

Blood

A vital fluid in humans and animals that delivers necessary substances such as nutrients and oxygen to the cells and transports metabolic waste products away.

Interval Training

A type of workout alternating between periods of high-intensity exercise and periods of lower intensity or rest, effective for building endurance and strength.

Aerobic Workouts

Exercises that increase the heart rate and promote the circulation of oxygen through the blood, improving overall fitness.

High Intensity

A level of exercise or activity that requires a significant amount of effort and results in rapid breathing and increased heart rate.