If Company a Has a Higher Degree of Operating Leverage

question 29

Multiple Choice

If company A has a higher degree of operating leverage than company B,then:

• A) company A's variable expenses are high.
• B) company A's profits are more sensitive to percentage changes in sales.
• C) company A is more profitable.
• D) company A is less risky.

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Definitions:

Reserved Funds

money set aside for specific purposes or emergencies, ensuring financial stability or fulfilling certain conditions.

Cashier's Checks

A check issued by a bank, drawn on its own funds and signed by a cashier, guaranteeing payment to the payee named on the check.

Issuing Banks

Financial institutions that provide cardholder services for credit, debit, or other payment cards, including the issuance of cards and management of the accounts associated with them.

Drawer's Signature

The signature of the person who writes a check or draft, legally binding the drawer to the terms of the document.