Forde Co Has an Operating Leverage of 4

question 24

Multiple Choice

Forde Co. has an operating leverage of 4. Sales are expected to increase by 12% next year. Operating income is

• A) unaffected
• B) expected to increase by 3%
• C) expected to increase by 48%
• D) expected to increase by 4%

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Definitions:

Mucus

A thick, slippery substance produced by the mucous membranes and glands, used to lubricate and protect certain parts of the body like the respiratory tract.

Goblet Cells

Specialized epithelial cells that produce and secrete mucus onto mucosal surfaces, such as the respiratory and digestive tracts.

Endocrine Cells

Specialized cells that secrete hormones directly into the blood.

Produce Hormones

The biological process by which glands or organs synthesize and release chemical substances that regulate various body functions.