A Degree of Operating Leverage of 1

question 68

Multiple Choice

A degree of operating leverage of 1.5 times indicates that _____.

• A) for every 1 percent change in EPS there will be a 1.5 percent change in sales
• B) for every 1 percent change in interest there will be a 1.5 percent change in EBIT
• C) for every 1 percent change in sales there will be a 1.5 percent change in EBIT
• D) for every 1 percent change in EBIT there will be a 1.5 percent change in EPS
• E) for every 1 percent change in sales there will be a 1.5 percent change in EPS

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Definitions:

Primary

First in order of importance or sequence; the main or most significant element.

Secondary

Pertaining to information or sources that are once removed from the original or primary source, often involving analysis, interpretation, or synthesis of primary data.

Tertiary

Referring to the third in order, level, or stage, often used in the context of education or industry sectors.

Professional Associations

Organizations that represent the interests of professionals within a specific industry or field, offering resources, networking opportunities, and support.