If a Change in Sales Results in a Greater Relative

question 41

Multiple Choice

If a change in sales results in a greater relative change in operating income (EBIT) , we know that the firm has

• A)a degree of operating leverage greater than one.
• B)a degree of financial leverage greater than one.
• C)a degree of operating leverage less than one.
• D)a degree of financial leverage less than one.
• E)none of the above.

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Definitions:

Union Density Rate

A measure of the proportion of workers within a specific industry or country who are members of trade unions.

Industrial Development

The process of building up a country's capacity to process raw materials and manufacture goods for consumption or export.

Canadian Labor Law

The body of laws regulating employment, unions, and collective bargaining in Canada.

Decentralization

The distribution of decision-making powers and responsibilities away from a central authority to regional or local authorities or to individual units within an organization.