With the Existence of Fixed Operating Costs, a Decrease in Sales

question 201

Multiple Choice

With the existence of fixed operating costs, a decrease in sales will result in ________ in EBIT.

• A) a proportional increase
• B) an equal increase
• C) a less than proportional decrease
• D) a more than proportional decrease

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Definitions:

Disjunctive Syllogism

A form of logical argument that concludes one disjunct must be false if the other disjunct is true in a "either/or" scenario.

Particular Proposition

A statement in logic that asserts something about one or more but not all members of a class.

Robust

Strong and effective in all or most situations and conditions; capable of withstanding or overcoming adverse conditions.

Valid Argument

A logical statement where the conclusion necessarily follows from the premises, based on sound reasoning.