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.

---

Definitions:

Justice Reinvestment

A policy approach that reallocates resources from the prison system to community-based initiatives to prevent offending and reoffending.

Incarceration Rates

The number of individuals held in jail or prison per 100,000 of the national population.

Morality Policies

Public policies that are driven by societal values and ethical considerations, often addressing controversial issues like abortion or substance use.

Public Opinion

The collective attitudes or beliefs of the general public on a specific topic or set of topics.