As Additional Equipment Is Purchased, the Level of fiXed Costs

question 313

Multiple Choice

As additional equipment is purchased, the level of fixed costs tends to _____ and the degree of operating leverage tends to _____

• A) Remain constant; remain constant.
• B) Rise; rise.
• C) Rise; fall.
• D) Fall; rise.
• E) Fall; fall.

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Definitions:

Subrogation

The legal process by which one party stands in for another to claim restitution or indemnity from a third party for a loss or damage.

Improper Payment

Payments made by organizations that should not have been made or that were made in an incorrect amount.

Preauthorized Electronic Transfer

An automatic transfer of funds from one account to another, agreed upon in advance by the account holder.

Financial Institution

Organizations that provide financial services, including banks, credit unions, and insurance companies.