Operating Leverage Exists When

question 43

Multiple Choice

Operating leverage exists when:

• A) a company utilizes debt to finance its assets.
• B) management buys enough of the company's shares of stock to take control of the corporation.
• C) the organization makes purchases on credit instead of paying cash.
• D) small percentage changes in revenue produce large percentage changes in profit.

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Definitions:

Specialists

Experts or organizations highly skilled in a specific and narrow area of a field or industry.

Functional Level

Refers to the operational and tactical aspects of an organization, focusing on specific roles or departments such as marketing or finance.

Marketing Department

A division within a company that focuses on developing strategies to promote, sell, and distribute products or services effectively.

Corporate Culture

Refers to the shared values, beliefs, and practices that characterize the social and psychological environment of an organization, influencing its employees' behaviour and identity.