If Company a Has a Higher Degree of Operating Leverage

question 62

Multiple Choice

If company A has a higher degree of operating leverage than company B, then:

• A) company A has higher variable expenses.
• B) company A's profits are more sensitive to percentage changes in sales.
• C) company A is more profitable.
• D) company A is less risky.

---

Definitions:

Truncated Scales

Measurement tools or rating systems that have been shortened or condensed to remove extreme values or to simplify the evaluation process.

3D Graphs

Visual representations of data in three dimensions, used to illustrate complex relationships between variables.

Pie Charts

A type of graph in which a circle is divided into sectors that each represent a proportion of the whole.

Data Displays

Visual representations of data designed to make information easier to understand.