When a Firm Increases Its Degree of Operating Leverage by Substituting

question 80

True/False

When a firm increases its degree of operating leverage by substituting fixed costs for variable costs,it normally does so to decrease its breakeven point and to increase its profit.

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Definitions:

Z-scores

Scores that are normalized to show the number of standard deviations a data point is away from the average.

Standard Normal Distribution

A Gaussian distribution where the mean is zero and the standard deviation is one.

Between

Used to describe a relationship or comparison involving two or more variables or groups.

Z-scores

A measure of how many standard deviations an element is from the mean. It is used in statistics to identify how unusual or typical a data point is.