If 97% of Managers Hear Information Through the Grapevine and Then

question 57

Multiple Choice

If 97% of managers hear information through the grapevine and then pass the information on, they are most accurately referred to as:

• A) isolates
• B) dead enders
• C) liaisons
• D) rumorists

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Definitions:

Operating Leverage

A financial ratio that measures the degree to which a firm can increase operating income by increasing revenue, highlighting the fixed versus variable costs structure.

Financial Leverage

The use of borrowed funds to increase the potential return on investment, amplifying both potential gains and losses.

Fixed Cash Outflows

Regular, set payments made by a business, such as rent, salary payments, and loan repayments.

Operating Leverage

An indicator of how increases in revenue lead to rises in operational profit, reflecting the company's balance of fixed to variable expenses.