Operating Leverage Is Greater

question 18

Multiple Choice

Operating leverage is greater:

• A)The greater the percentage of non-discretionary costs.
• B)The lower the percentage of non-discretionary costs.
• C)The greater the percentage of discretionary costs.
• D)The lower the percentage of discretionary costs.
• E)None of the above.

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Definitions:

Voluntary Liquidation

The process initiated by a company's directors to voluntarily close down the business, sell its assets, and use the proceeds to pay off creditors before any remaining surplus is distributed to the shareholders.

Bankruptcy Estate

All legal or equitable interests of the debtor in property at the time of the bankruptcy filing, including all assets.

Prepetition Assets

Assets that an individual or entity possesses before filing for bankruptcy protection.

Automatic Stay

A legal provision that halts all lawsuits, foreclosures, and collection activities against a debtor the moment a bankruptcy petition is filed.