If a Change in Sales Results in a Greater Relative

question 41

Multiple Choice

If a change in sales results in a greater relative change in operating income (EBIT) , we know that the firm has

• A)a degree of operating leverage greater than one.
• B)a degree of financial leverage greater than one.
• C)a degree of operating leverage less than one.
• D)a degree of financial leverage less than one.
• E)none of the above.

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