Everything Else Equal, in Which of the Following Situations Will

question 14

Multiple Choice

Everything else equal, in which of the following situations will a firm's degree of operating leverage (DOL) increase? Assume the firm currently generates a positive net operating income. 

• A)Sales increase substantially.
• B)The firm issues preferred stock.
• C)Fixed costs are decreased.
• D)The firm takes advantage of quantity discounts for the first time.
• E)The firm's sales move closer to its operating breakeven point.

Evaluate and apply emotional intelligence and the "you" attitude in interpersonal communication.

Understand the role of critical thinking in evaluating evidence and forming logical conclusions.

Describe the communication mediums and channels used in organizational settings.

Recognize the importance of feedback in the communication process and how it can be utilized to enhance message effectiveness.

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Definitions:

ROA

Return on Assets represents a financial metric that measures a company's profitability in relation to its overall assets.

Capital Structure

The mix of different forms of external funds used by a firm to finance its activities, including debt and equity.

ROE

Return on Equity (ROE) is a financial ratio that measures the profitability of a company relative to shareholder equity.

Times Interest Earned Ratio

A financial ratio that measures a company's ability to meet its debt obligations, calculated as earnings before interest and taxes divided by interest expense.