If a fiRm's fiXed Costs Are Exactly Equal to Its

question 101

Multiple Choice

If a firm's fixed costs are exactly equal to its depreciation expense, and both are greater than zero, then at its cash break-even point the DOL ______________.

• A) Is equal to one.
• B) Is equal to two.
• C) Is greater than two.
• D) Is undefined since you can't divide by zero.
• E) Cannot be determined without more information.