What Happens to a Firm with High Operating Leverage When

question 14

Multiple Choice

What happens to a firm with high operating leverage when the overall level of sales is very high?

• A) The firm will have higher levels of fixed costs.
• B) The firm will enjoy high profits.
• C) The firm will not break even in accounting terms.
• D)The firm will have a reduced level of depreciation.

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Definitions:

Local Account

A user account that is created and managed on a single computer or device, not associated with online or network services.

Cloud

A network of remote servers hosted on the Internet to store, manage, and process data, as opposed to using a local server or a personal computer.

Local Account

An account that is created and managed directly on a device, allowing access to that specific device without the need for online authentication.

Administrator Account

A user account with special permissions to manage and configure system settings, software installations, and user permissions on a computer or network.