Alvarez Technologies Has Sales of $3,000,000

question 21

Multiple Choice

Alvarez Technologies has sales of $3,000,000.The company's fixed operating costs total $500,000 and its variable costs equal 60% of sales,so the company's current operating income is $700,000.The company's interest expense is $500,000.What is the company's degree of total leverage (DTL) ?

• A)4.8870
• B)5.1443
• C)5.4150
• D)5.7000
• E)6.0000

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Definitions:

Natural Extrinsic Rewards

Benefits or incentives provided by the environment or context, not inherently related to the activity being performed.

Merit Pay Increases

Salary increments awarded to employees based on their performance, productivity, or achievements.

Operant Conditioning

A learning process in which the strength of a behavior is modified by reinforcement or punishment.

Ivan Pavlov

A Russian physiologist known for his work in classical conditioning, particularly his experiments with dogs, demonstrating that behavior can be conditioned.