For a Firm with a DOL of 3

question 12

Multiple Choice

For a firm with a DOL of 3.5,an increase in sales of 6% will:

• A) increase pretax profits by 3.5%.
• B) decrease pretax profits by 3.5%.
• C) increase pretax profits by 21.0%.
• D) increase pretax profits by 1.71%.

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Definitions:

Envelopes

In a biological context, refers to membranous structures that enclose or encapsulate parts of cells or viruses.

Unprofitable

Describing a business or operation that generates a financial loss rather than a profit.

Department

A distinct part of an organization with a specific function or group of related functions.

Payroll Items

Various components that make up an employee's pay, including wages, bonuses, deductions, and taxes.