If a Firm Has a Degree of Operating Leverage (DOL)

question 175

Multiple Choice

If a firm has a degree of operating leverage (DOL) that is greater than 1.0, the we know that a 1.0 percent change in will cause in a change in that is 1.0 percent.

• A)EBIT; sales; greater than
• B)EBIT; net income; greater than
• C)sales; EBIT; less than
• D)sales; EBIT; greater than
• E)EBIT; net income; less than

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Definitions:

Prototype

A typical or standard example of a particular concept or category, often used as a reference point for comparing other items in the same category.

Subconscious

The subconscious is a part of the mind that operates below the level of conscious awareness, influencing thoughts, feelings, and behaviors without our direct knowledge.

Nonconscious

Pertaining to processes that occur in the mind without conscious awareness, such as breathing or the beating of the heart.

Deliberate

To think over or consider something carefully and intentionally before making a decision.