With the Existence of Fixed Operating Costs, an Increase in Sales

question 76

Multiple Choice

With the existence of fixed operating costs, an increase in sales will result in___________increase inEBIT.

• A) a proportional
• B) a more than proportional
• C) a less than proportional
• D) an equal

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Definitions:

Rescission

The legal remedy of canceling, terminating, or annulling a contract and restoring the parties to their original positions as if the contract had never been made.

Compensatory Damages

Financial compensation awarded to a plaintiff to cover losses or injuries that have been directly caused by the actions of the defendant.

Negligent Misrepresentation

A false statement made carelessly that causes someone to suffer damages because they relied on it being true.

Fraudulent Misrepresentation

Intentional deception made by one party to induce another to enter into a contract, resulting in harm or loss.