Which of the Following Best Describe the Term Operating Leverage

question 84

Multiple Choice

Which of the following best describe the term operating leverage.

• A) Investigation of what happens to NPV when only one variable is changed.
• B) The determination of what happens to NPV estimates when we ask what-if questions.
• C) The degree to which a firm or project relies on fixed costs.
• D) The change in costs that occurs when there is a small change in output.
• E) Taking into account the managerial options that are implicit in a project.

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Definitions:

Revenue Opportunities

Potential scenarios or strategies that can lead to increased income or profits for a business or organization.

Public Utility Corporation

A company that provides essential public services, such as water, electricity, and natural gas, regulated by government entities.

Legislation

The process of making or enacting laws, or the body of laws that have been enacted by a legislative body.

Enforceable

Capable of being put into effect or action according to legal principles or regulations.