The Degree of Operating Leverage at a Specific Level of Sales

question 12

True/False

The degree of operating leverage at a specific level of sales helps the managers calculate the effect that potential changes in sales will have on operating profit.

---

Definitions:

Treasury Bills

Short-term government securities issued at a discount from the face value and maturing at par, typically within a year.

Beta

A measure of a stock's volatility in relation to the overall market, indicating the stock's risk compared to that of the average market risk.

Risk Level

The degree of uncertainty or potential financial loss inherent in an investment decision.

Standard Deviation

An indicator of the degree of spread or diversity within a collection of numbers.