Which of the Following Statements Is CORRECT? as a Firm

question 26

Multiple Choice

Which of the following statements is CORRECT? As a firm increases the operating leverage used to produce a given quantity of output, this will

• A) normally lead to a decrease in its business risk.
• B) normally lead to a decrease in the standard deviation of its expected EBIT.
• C) normally lead to a decrease in the variability of its expected EPS.
• D) normally lead to a reduction in its fixed assets turnover ratio.
• E) normally lead to an increase in its fixed assets turnover ratio.

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Definitions:

Unconditioned Stimulus

In classical conditioning, a stimulus that naturally and automatically triggers a response without prior conditioning.

Tone

The quality or character of sound, or the attitude expressed in writing or speech, conveyed through the choice of words and style.

Air Puff

A method often used in psychological experiments to deliver a quick burst of air as a stimulus or to measure blink reflexes.

Conditioned Response

A response that is taught in reaction to a stimulus that was once neutral but has become linked with a stimulus that naturally evokes a response.