Which of the Following Is True of the Degree of Operating

question 8

Multiple Choice

Which of the following is true of the degree of operating leverage (DOL) ?

• A) The higher the DOL, the closer the firm is to its financial breakeven point.
• B) The higher the DOL, the lower the financial risk of the firm.
• C) The lower the DOL, the higher the operating risk of the firm.
• D) The higher the DOL, the closer the firm is to its operating breakeven point.
• E) The higher the DOL, the higher the percentage increase in the sales.

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Definitions:

Behavior Modification

A technique based on operant conditioning principles used to change or modify problematic behaviors by manipulating environmental factors and consequences.

Vicarious Reinforcement

Learning that occurs through observing the consequences of another person's actions and then modifying one's own behavior.

Manipulating

In psychology, refers to influencing or controlling others in a skillful but often unfair or deceitful way.

Self-efficacy

A rephrased definition: The confidence in one's own ability to achieve desired outcomes through one's actions.