If a Company Has Fixed Costs and Is Operating at a Level

question 142

Multiple Choice

If a company has fixed costs and is operating at a level above the break-even point, what happens to profits when sales increase by 20%?

• A)Profits will increase by less than 20%.
• B)Profits will increase by 20%.
• C)Profits will increase by more than 20%.
• D)Profits will decrease by less than 20%.

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