A High Degree of Operating Leverage Suggests That

question 75

Multiple Choice

A high degree of operating leverage suggests that

• A) a small percentage increase in sales leads to a large percentage increase in earnings before interest and taxes.
• B) a small percentage increase in sales leads to an identical percentage increase in earnings before interest and taxes.
• C) a large percentage increase in sales leads to a small percentage increase in earnings before interest and taxes.
• D) none of the above.

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