Which of the Following Is Not True with Respect to Operating

question 65

Multiple Choice

Which of the following is not true with respect to operating leverage?

• A)Higher operating leverage insulates a firm from losses in bad times.
• B)Firms with higher operating leverage have a larger contribution from each sale, so they accumulate profits or losses faster as they move away from the breakeven point in sales.
• C)Increased operating leverage increases business risk.
• D)Virtually all firms have at least some operating leverage.

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