Operating Leverage Measures the Effect of Fixed Operating Costs on the Relationship

question 176

Multiple Choice

Operating leverage measures the effect of fixed operating costs on the relationship between ________.

• A) sales and EBIT
• B) sales and EPS
• C) EBIT and EPS
• D) EBIT and dividend

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Definitions:

Generate Revenue

The process of earning income from operations or activities, typically through the sale of goods or services.

Alternative Future Uses

Potential different applications or functions which an asset can serve in the future.

Research and Development

Activities undertaken by a business or government in order to innovate and introduce new products, processes, or services, or to improve upon existing ones.

Research and Development

The investigative activities a business conducts to improve existing products and procedures or to lead to the development of new products and procedures.