Which of the Following Statements About the Degree of Operating

question 27

Multiple Choice

Which of the following statements about the degree of operating leverage (DOL) is correct?

• A)The higher the DOL, the closer the firm is to its financial breakeven point.
• B)The higher the DOL, the higher the firm's financial risk.
• C)The lower the DOL, the higher the firm's operating risk.
• 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 when fixed operating costs change.

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