Bendel Incorporated Has an Operating Leverage of 7

question 341

Multiple Choice

Bendel Incorporated has an operating leverage of 7.3. If the company's salesvolume increases by 3%, its net operating income should increase by about:

• A) 243.3%
• B) 7.3%
• C) 21.9%
• D) 3.0%

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Definitions:

Gross Domestic Product

The monetary value of all finished goods and services made within a country during a specific period.

Interest Rate

The percentage charged on a loan or paid on savings over a certain period of time, reflecting the cost of borrowing or the return on savings.

Investment

An asset or item acquired with the goal of generating income or appreciation in value.

Financial Securities

Financial instruments representing some type of financial value, including stocks, bonds, and options, which can be bought and sold in financial markets.