If a Firm That Has a Degree of Operating Leverage

question 6

Multiple Choice

If a firm that has a degree of operating leverage (DOL) greater than 1.0 experiences a 1.0 percent change in _____, its earnings before interest and taxes (EBIT) will change by _____1.0 percent. 

• A)earnings per share; greater than
• B)net income; greater than
• C)net operating income; less than
• D)sales; greater than
• E)fixed costs; less than

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Definitions:

Technological-Economic Growth

The increase in economic output (growth) driven by technological innovations and advancements, leading to improved efficiencies and productivity.

Spaceship-Earth Strategy

A metaphorical concept emphasizing Earth's finite resources and the need for sustainable environmental management.

Stewardship

The responsible management and care of resources or property, often with a focus on conservation and sustainability.

Planetary Management

The active manipulation and management of a planet's environment and resources to ensure sustainability and habitability for its inhabitants.