A Firm with High Operating Leverage Is Expected To

question 10

Multiple Choice

A firm with high operating leverage is expected to:

• A) have high variable costs.
• B) have low fixed costs.
• C) have a high degree of profitability.
• D)perform better when sales are high.

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Definitions:

Interest Rate

The percentage of a sum of money charged for its use, often expressed as an annual rate.

Exchange Rate

The value of one currency expressed in terms of another currency, used to determine how much of one currency can be exchanged for another.

Tax Rebate

A refund on taxes when the tax liability is less than the taxes paid.

Interest Rate

The percentage of a sum of money charged for its use, usually expressed as an annual percentage.