In a Company with Low Operating Leverage

question 75

Multiple Choice

In a company with low operating leverage

• A)fixed costs are high and variable costs are low.
• B)small increases in sales lead to large increases in operating 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.
• E)companies follow the strategy of replacing variable costs with fixed costs.

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Definitions:

Vitamin B6

A water-soluble vitamin crucial for brain development and function and helps the body convert food into energy.

Peptidase

An enzyme that breaks down peptides into amino acids by cleaving the peptide bonds between amino acids.

Intestinal Lipase

An enzyme that digests fat.

Sucrase

An enzyme that catalyzes the hydrolysis of sucrose into glucose and fructose.