The Magnitude of Operating Leverage for Forbes Corporation Is 1

question 53

Multiple Choice

The magnitude of operating leverage for Forbes Corporation is 1.8 when sales are $200,000 and net income is $24,000.If sales increase by 5%,what is net income expected to be?

• A) $25,200
• B) $26,160
• C) $24,667
• D) $43,200

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Definitions:

Law of Effect

A psychological principle suggesting that behaviors followed by satisfactory outcomes are likely to recur, while those followed by unsatisfactory outcomes are less likely to be repeated.

Satisfying Effects

Positive outcomes or feelings that result from fulfilling or exceeding one's needs or expectations.

Stimulus

Any occurrence or state that triggers a response from a biological entity.

Shaping

A method of behavior modification that involves reinforcing behaviors that are successively closer to the desired behavior.