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.

---

Definitions:

Processing Ability

The capacity of an individual to perceive, analyze, and respond to information in their environment.

Freud

Sigmund Freud was an Austrian neurologist known as the founding father of psychoanalysis, a method for treating psychopathology through dialogue between a patient and a psychoanalyst.

Psychic Energy

A concept in psychoanalytic theory referring to the force driving human behavior and emotional processes.

Repression

In psychoanalytic theory, the defense mechanism that banishes the past from current awareness.