Firms with a High Degree of Operating Leverage Are

question 44

Multiple Choice

Firms with a high degree of operating leverage are

• A) easily capable of surviving large changes in sales volume.
• B) usually trading off lower levels of risk for higher profits.
• C) significantly affected by changes in interest rates.
• D) trading off higher fixed costs for lower per-unit variable costs.

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Definitions:

Karl Marx

A 19th-century philosopher, economist, and revolutionary socialist known for his theories about capitalism and communism.

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