Multiply

question 64

Multiple Choice

Multiply.

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Definitions:

Operating Leverage

A measure of how revenue growth translates into growth in operating income, indicating the percentage of fixed to variable costs a company has.

Variable Expenses

Costs that vary directly and proportionately with changes in production volume or business activity.

Fixed

Refers to an interest rate or investment that remains constant and does not fluctuate over a specified period.

Operating Leverage

This is a measure of how revenue growth translates into growth in operating income, showing the proportion of fixed costs in a company's cost structure.