The Degree of Operating Leverage for ABC Inc

question 82

Multiple Choice

The degree of operating leverage for ABC Inc.is 3.5,and the degree of operating leverage for XYZ Corporation is 7.0.According to this information,which firm is considered to have greater business risk?

• A) ABC Inc.
• B) XYZ Corporation.
• C) The degree of operating leverage is not a measure of business risk,so it is not possible to tell which firm has the greater business risk given the above information.
• D) To determine which firm has the greater business risk,we need to know the operating income (NOI or EBIT)of each firm.XYZ Corporation would have less business risk if its operating income is at least twice that of ABC Inc.
• E) None of the above is a correct answer.

Compare and interpret the probability of distinct and identical resamples occurring.

Differentiate between sampling with and without replacement in the context of bootstrapping.

Recognize the minimum number of resamples required to compute a reliable bootstrap confidence interval and estimate the standard error.

Understand the distinction between direct and indirect costs and their traceability to cost objects.

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Definitions:

Incremental Steps

Small, sequential advances or improvements made towards achieving a larger goal.

Generate-and-Test

A problem-solving strategy that involves attempting numerous solutions and checking their validity to solve a given problem.

Systematic Test

An organized method of evaluating attributes or capabilities in a structured manner to ensure reliability and validity in the findings.

Incremental Steps

Small, gradual changes or actions taken towards achieving a goal or completing a task.