Select the Incorrect Statement Regarding Cost Structures

question 32

Multiple Choice

Select the incorrect statement regarding cost structures.

• A) Highly leveraged companies will experience greater profits than companies less leveraged when sales increase.
• B) The more variable cost, the higher the fluctuation in income as sales fluctuate.
• C) When sales change, the amount of the corresponding change in income is affected by the company's cost structure.
• D) Faced with significant uncertainty about future revenues, a low leverage cost structure is preferable to a high leverage cost structure.

---

Definitions:

Balance of Payments

A statement that summarizes an economy's transactions with the rest of the world for a specific time period.

Specific Accounts

Accounts designated for recording particular transactions or financial activities that have unique characteristics.

International Monetary Fund

An international organization designed to foster global monetary cooperation, secure financial stability, and facilitate international trade among its member countries.

Founded

The act of establishing something, such as a company or organization, often marking its beginning.