If a Firm Has a Degree of Operating Leverage (DOL)

question 175

Multiple Choice

If a firm has a degree of operating leverage (DOL) that is greater than 1.0, the we know that a 1.0 percent change in will cause in a change in that is 1.0 percent.

• A)EBIT; sales; greater than
• B)EBIT; net income; greater than
• C)sales; EBIT; less than
• D)sales; EBIT; greater than
• E)EBIT; net income; less than

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Definitions:

Sensory Registers

The initial processing systems that hold incoming information from the senses for a very brief period, allowing it to be perceived.

Echo

A sound that is reflected off a surface and heard again by its source or listener, often used in the study of acoustics.

Icon

in a general sense, denotes a symbol or graphic representation on a computer screen or a symbolically significant figure or thing in wider culture.

Retain Information

The ability to maintain and keep information in memory over time.