If a Company Has Very Low Operating Leverage (I

question 49

Multiple Choice

If a company has very low operating leverage (i.e.,a low proportion of fixed costs in the cost structure) and no changes are expected in operations:

• A) percentage change income statement percentages can serve as the basis for projecting operating expenses.
• B) using common-size income statement percentages will overstate future projected operating expenses.
• C) using common-size income statement percentages will understate future projected operating expenses.
• D) using common-size income statement percentages can serve as a reasonable basis for projecting future operating expenses.

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Definitions:

Sensitization

Sensitization is an increase in the behavioral response following repeated exposure to a stimulus, making an organism more sensitive to that stimulus over time.

Behavioral Contrast

occurs when a change in the condition of reinforcement in one context leads to a change in behavior in another context.

Higher-order Conditioning

A form of conditioning in which a stimulus that has become a conditioned stimulus is paired with a new neutral stimulus, creating a second conditioned stimulus.

Opponent Process

A theory suggesting that emotions are regulated by mechanisms that operate in opposing pairs, allowing for emotional adaptation over time.