In a Company with Low Operating Leverage

question 116

Multiple Choice

In a company with low operating leverage:

• A)fixed costs are high and variable costs are low
• B)large changes in sales volume result in small changes in net income
• C)there is a higher possibility of net loss than a higher-leveraged firm
• D)less risk is assumed than in a highly leveraged firm

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Definitions:

Assess Factors

The process of evaluating or identifying various elements or conditions that contribute to a specific situation or outcome.

Cross-Cultural Interaction

The process by which people from different cultural backgrounds communicate and engage with one another, often leading to increased understanding and diversity.

Family Patterns

The behaviors, values, and expectations that are passed down within a family, influencing the dynamics and relationships among family members.

Individual Characteristics

Traits or features that distinguish one person from another, including physical, psychological, and behavioral attributes.