When a Firm Has Fixed Operating Costs, Operating Leverage Is

question 182

True/False

When a firm has fixed operating costs, operating leverage is present. In that case, an increase in sales results in a more-than-proportional increase in EBIT, and a decrease in sales results in a more-than-proportional decrease in EBIT.

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Definitions:

Widespread Use

The extensive adoption or utilization of a particular product, technique, or innovation across a broad range of areas or among a large group of people.

Canadians

Individuals who are citizens of Canada, a country located in North America, known for its multicultural society and bilingual official languages of English and French.

Negligence Action

A legal action taken for injury or damage resulting from a party's failure to exercise the care that a reasonably prudent person would have in similar circumstances.

B.C. Supreme Court

The superior trial court for the province of British Columbia, Canada, handling both civil and criminal cases.