Firms with a High Degree of Operating Leverage Are

question 44

Multiple Choice

Firms with a high degree of operating leverage are

• A) easily capable of surviving large changes in sales volume.
• B) usually trading off lower levels of risk for higher profits.
• C) significantly affected by changes in interest rates.
• D) trading off higher fixed costs for lower per-unit variable costs.

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Definitions:

Standard Deviation

A numerical indicator that calculates the spread or variability among a collection of data points.

Standard Time

The time set for the completion of a task, often used as a benchmark in manufacturing and other operations to measure efficiency.

Confidence

Confidence denotes a belief in oneself, one's abilities, or the reliability of something or someone, reflecting trust and assurance.

Work Sampling

A statistical technique used for analyzing work efficiency and the distribution of work time among different tasks, by taking random samples of work activities.