If Sales Are $300,000,variable Costs Are 60% of Sales,and Operating

question 81

Multiple Choice

If sales are $300,000,variable costs are 60% of sales,and operating income is $40,000,what is the operating leverage?

• A)3.000
• B)7.500
• C)1.875
• D)4.500

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Definitions:

Constant Rate

A term used to describe a steady, unchanging rate of increase or decrease over time.

Stock Valuation

Stock valuation involves determining the intrinsic value of a public company's shares to assess whether they are under or overvalued.

Convertible Preferred Stock

A type of preferred stock that holders can convert into a specified number of shares of common stock, usually after a predetermined date.

Yield-to-Maturity

The total return anticipated on a bond if the bond is held until the end of its lifetime, considering all payments and assuming a reinvestment of coupons.