What Happens to a Firm with High Operating Leverage When

question 70

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 fixed costs.

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Definitions:

UETA

The Uniform Electronic Transactions Act is a law adopted by most U.S. states that establishes the legal validity of electronic signatures and records.

Article 3

Refers to a segment or section within a larger document, such as a constitution or statute, that addresses a specific topic.

UCC

The Uniform Commercial Code is an extensive collection of regulations that oversee every commercial transaction across the United States.

Electronic Negotiable Instruments

Financial instruments that are signed electronically and promise to pay a certain sum of money to the bearer or assigned party.