Mark Company, Inc

question 163

Multiple Choice

Mark Company, Inc. sells electronics. The company generated sales of $45,000. Contribution margin is $20,000 and net income is $4,000. Based on this information, the magnitude of operating leverage is:

• A) 2.25 times
• B) 11.25 times
• C) 5 times
• D) 6.25 times

---

Definitions:

Securities Act

Legislation that regulates the issuance and sale of securities to protect investors from fraud.

Net Financial Assets

The difference between a person's or entity's total financial assets and total financial liabilities.

Security

Financial instruments or assets held to back debts or investments, or as a means to ensure the fulfillment of financial obligations.

Insurance Contract

A legally binding agreement between an insurer and the insured, detailing the terms for the payment of claims under certain conditions.