Which of the Following Statements Is True Regarding Operating Leverage

question 30

Multiple Choice

Which of the following statements is true regarding operating leverage?

• A)Companies with high operating leverage will earn lower profits than companies with low operating leverage.
• B)Companies with high operating leverage will earn higher profits than companies with low operating leverage.
• C)Companies with high operating leverage generally experience fewer profit fluctuations as sales fluctuate than do companies with low operating leverage.
• D)Companies with high operating leverage generally experience larger operating profit fluctuations as sales fluctuate than do companies with low operating leverage
• E)None of the answer choices is correct.

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