Which of the Following Statements Is Not True

question 56

Multiple Choice

Which of the following statements is not true?

• A) Operating leverage refers to the extent to which a company's net income reacts to a given change in sales.
• B) Companies that have higher fixed costs relative to variable costs have higher operating leverage.
• C) When a company's sales revenue is increasing, high operating leverage is good because it means that profits will increase rapidly.
• D) When a company's sales revenue is decreasing, high operating leverage is good because it means that profits will decrease at a slower pace than revenues decrease.

---

Definitions:

Proprietary Format

A file or data format that is owned by a company or individual and has restrictions on its use without permission.

MS Word

A widely-used word processing software developed by Microsoft, part of the Microsoft Office suite.

Asynchronous Communication

Communication that does not occur in real-time, allowing parties to respond at their convenience, such as through email or message boards.

RSS

Really Simple Syndication, a type of web feed that allows users and applications to access updates to online content in a standardized, computer-readable format.