Which of the Following Is True for a Firm with High

question 95

Multiple Choice

Which of the following is true for a firm with high operating leverage?

• A)It has a relatively high amount of mixed costs.
• B)It is generally thought to be riskier than a company with lower operating leverage.
• C)It has a zero contribution margin ratio at the break-even point.
• D)If sales increase, its profits will increase at a slower rate than a company with lower operating leverage.