If Company a Has a Higher Degree of Operating Leverage

question 125

Multiple Choice

If company A has a higher degree of operating leverage than company B,then which of the following statements is true?

• A) Company A has higher variable expenses.
• B) Company A's profits are more sensitive to percentage changes in sales.
• C) Company A is more profitable.
• D) Company A is less risky.

---

Definitions:

Shorthand

A rapid handwriting method using symbols and abbreviations for quick note-taking or transcription, often used in journalism and secretarial work.

Laptops

Portable computers that are small enough to use on one's lap, characterized by their convenience for mobile use.

Key Words

Specific, significant words within a text or speech that are essential to understanding the overall message or subject.

Empiricism

A theory that states knowledge comes only or primarily from sensory experience.