If a Firm Has the Lowest Possible Degree of Operating

question 19

Multiple Choice

If a firm has the lowest possible degree of operating leverage and the lowest possible degree of financial leverage, then

• A) DOL equals 1, and DFL equals 0.
• B) DOL equals 0, and DFL equals 1.
• C) DOL equals 1, and DFL equals 1.
• D) none of these

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Definitions:

Silica Content

The proportion of silicon dioxide (SiO2) in a rock, mineral, or geological sample, influencing its physical properties and behavior.

Caldera

A vast volcanic depression, usually created when land collapses after a volcanic explosion.

Pyroclastic Flows

Fast-moving current of hot gas and volcanic materials that move away from a volcano during an explosive eruption.

Ash Column

A large plume of volcanic ash that is ejected into the atmosphere during a volcanic eruption.