Magnificent Manes Hair Salons Is Forecasting a 17% Increase in Sales

question 12

Multiple Choice

Magnificent Manes Hair Salons is forecasting a 17% increase in sales. What would be its degree of operating leverage if it anticipates that its EBIT will go from $150,000 to $175,000 during the same time frame?

• A) 1.76
• B) 2.5
• C) .98
• D) 1.11

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Definitions:

Demographic Segmentation

The process of dividing a market into segments based on demographic factors such as age, gender, income, education, and family size.

Geodemographic Segmentation

The process of dividing a market into smaller groups based on geographic location and demographic characteristics for targeted marketing strategies.

Psychographic Segmentation

The division of a market into different segments based on consumers' personality traits, values, attitudes, interests, and lifestyles.

Benefit Segmentation

A strategy in marketing that categorizes a market into various segments, focusing on the distinct advantages customers look for in a product.