Which of the Following Is a Business Transaction

question 149

Multiple Choice

Which of the following is a business transaction?

• A)A company signs a contract for services to be provided during the first quarter of the next fiscal year.
• B)A company pays its employees a year-end bonus.
• C)A company hires a new marketing manager.
• D)A company applies for a mortgage that will be used to purchase a new office building.

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Definitions:

Operating Leverage

Operating Leverage is a measure of how revenue growth translates into growth in operating income, determined by the proportion of fixed versus variable costs a company has.

Variable Cost

Operational expenses of a business that alter in accordance with the level of activity.

Tax Rate

A tax rate is the percentage at which an individual or corporation is taxed on their income or profits.

Degree of Operating Leverage

A financial metric that measures the sensitivity of a company's operating income to its sales.