Which of the Following Statements Is True

question 63

Multiple Choice

Which of the following statements is true?

• A)The higher the firm's leverage,the higher the degree of sensitivity of profits to cost changes.
• B)The higher the firm's leverage,the lower the degree of sensitivity of profits to cost changes.
• C)The higher the firm's leverage,the higher the degree of sensitivity of profits to volume changes.
• D)The higher the firm's leverage,the lower the degree of sensitivity of profits to volume changes.

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Definitions:

Energy Required

The amount of energy needed to perform a particular task or process, such as manufacturing a product or operating a machine.

Smelt Copper

The process of extracting pure copper by heating and melting copper ore to separate it from other elements.

Marginal Revenue Product

The extra income produced by using another unit of a production input.

Technology Improvement

Advancements or enhancements in technology that lead to better productivity, efficiency, or product quality in various sectors.