Hedge Fun Is a Landscaping Firm That Specializes in Topiary

question 29

Multiple Choice

Hedge Fun is a landscaping firm that specializes in topiary.It contracts with the owners of 140 local homes and provides its service at an annual fee of $1,300.Its average variable cost is $900,and its annual fixed cost is $28,000.What is the degree of operating leverage?

• A) 0.5.
• B) 1.
• C) 1.5.
• D) 2.
• E) 2.5.

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Definitions:

Inflationary Times

Periods characterized by a general increase in prices and fall in the purchasing value of money.

Insurance Policies

Contracts between an insurer and a policyholder, outlining the terms under which the insurer agrees to pay a benefit upon the occurrence of a specified risk or event.

Bank Interest Rates

The percentage at which interest is paid by a borrower for the use of money that they borrow from a bank.

Indemnification

Compensation for harm or loss, often part of contracts to protect against potential legal liabilities or damages.