Firms with High Operating Leverage Tend to Have

question 48

Multiple Choice

Firms with high operating leverage tend to have:

• A) High asset turnover and high return on sales.
• B) Low asset turnover and low return on sales.
• C) Low asset turnover and high return on sales.
• D) High asset turnover and low return on sales.
• E) Decreased levels of short-term fixed costs.

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Definitions:

Justifiable Reliance

A principle in contract law requiring that a party's reliance on another's representation or promise must be reasonable and justified for it to be legally actionable.

Competent Parties

Individuals or entities that are legally capable of entering into a contract, meaning they have the mental capacity and legal authority to do so.

Economic Duress

This involves the use of unlawful pressure or threats by one party to compel another party to act in a way that is against their will or financial interest.

Subjective Evidence

Information or proof based on personal feelings, opinions, or tastes, rather than concrete facts.