Ajax Inc Is One of the Customers of a Well-Known Linen

question 44

Multiple Choice

Ajax Inc. is one of the customers of a well-known linen manufacturing company. Ajax has not ordered linen in some time, but when it did order in the past it ordered frequently, and its orders were of the highest monetary value. Under the given circumstances, Ajax is most likely to have an RFM score of ________.

• A)155
• B)511
• C)555
• D)151

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Definitions:

Cost Structure

The mix of fixed and variable cost used by a firm.

Financial Leverage

Utilizing borrowed funds to amplify the prospective gains of an investment.

Operating Leverage

The degree to which a company uses fixed operating costs, affecting its earnings before interest and taxes (EBIT) with changes in sales.

Breakeven Point

The financial position at which total costs equal total revenues, indicating that there is no net loss or gain.