Which of the Following Offers the Most Plausible Scenario for a Firm

question 95

Multiple Choice

Which of the following offers the most plausible scenario for a firm that maintained a constant degree of operating leverage when its level of fixed costs doubled?

• A) Depreciation expense increased.
• B) Variable cost percentage decreased.
• C) Sales revenues declined.
• D) Pretax profits decreased.

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Definitions:

Elastase

An enzyme that breaks down elastin, an important protein in connective tissue which provides elasticity.

Enzymatic Reaction

A chemical process catalyzed by enzymes, speeding up reactions in the cells.

Reactants

Reactants are substances initially present in a chemical reaction that are consumed during the reaction to form products.

Substrates

In biochemistry, substrates are the specific substances on which an enzyme acts to catalyze a chemical reaction, often converted into products.