In a Company with Low Operating Leverage

question 160

Multiple Choice

In a company with low operating leverage:

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

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Definitions:

Jean-Jacques Rousseau

A Genevan philosopher, writer, and composer of the 18th century, known for his influential thoughts on education and social contract theory.

Thomas Hobbes

An English philosopher known for his work in political philosophy, notably "Leviathan," advocating for the social contract theory.

John Rawls

A 20th-century American political philosopher who is known for his theory of justice as fairness, which attempts to reconcile egalitarian and liberal principles, detailed in his works such as "A Theory of Justice."

John Locke

An English philosopher and physician, widely regarded as one of the most influential of Enlightenment thinkers and commonly known as the "Father of Liberalism."