The Following Income Statement Is Provided for Grant, Inc What Is This Company's Magnitude of Operating Leverage?
A)0

question 143

Multiple Choice

The following income statement is provided for Grant, Inc. $\begin{array}{|l|c|}\hline \text { Sales revenue }(1,500 @ \$ 30 \text { per unit }) & \$ 45,000\\\hline \text { Variable costs }(1,500 @ \$ 14 \text { per unit }) & 21,000\\\hline \text { Fixed costs } &\underline{16,000} \\\hline \text { Net income } & \$8,000 \\\hline\end{array}$
What is this company's magnitude of operating leverage?

• A)0.33
• B)1.31
• C)2.00
• D)3.00

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Definitions:

Rate Of Return

Profitability or loss incurred from an investment within a fixed period, quantified as a percentage of the investment's buying cost.

Credit Default Swap

A financial derivative allowing an investor to "swap" or offset their credit risk with that of another investor.

CDS

CDS stands for Credit Default Swap, a financial derivative allowing an investor to "swap" or offset their credit risk with that of another investor.

Coupon Bond

A type of bond that offers interest payments through coupons to the bondholder until its maturity, when the principal amount is reimbursed.