Which of the Following Statements Is CORRECT? as a Firm

question 26

Multiple Choice

Which of the following statements is CORRECT? As a firm increases the operating leverage used to produce a given quantity of output, this will

• A) normally lead to a decrease in its business risk.
• B) normally lead to a decrease in the standard deviation of its expected EBIT.
• C) normally lead to a decrease in the variability of its expected EPS.
• D) normally lead to a reduction in its fixed assets turnover ratio.
• E) normally lead to an increase in its fixed assets turnover ratio.

---

Definitions:

Reflexes

Involuntary and automatic responses to stimuli, such as the blink reflex in response to a sudden bright light.

Biological Survival

The basic processes and functions necessary for an organism to live, including obtaining food, reproducing, and avoiding predators.

Grasping Reflex

An involuntary movement response in which an infant's fingers close around an object placed in their hand.

Voluntary Grasping

A deliberate and controlled act of seizing or holding objects, which is a developmental milestone in infants.