Which of the Following Statements About Operating Leverage Is True

question 29

Multiple Choice

Which of the following statements about operating leverage is true?

• A) Operating leverage reduces a firm's risk.
• B) Operating leverage is the responsiveness of the firm's EBIT to fluctuations in sales.
• C) Operating leverage involves the usage of fixed cost financial securities in the operation of a business.
• D) Operating leverage is the responsiveness of the firm's EPS to fluctuations in sales.

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