Calculating Operating Leverage

question 9

Multiple Choice

Calculating operating leverage. TurkeyJerkey Dried Meats Ltd had a degree of accounting operating leverage equal to 1.714 during the most recent period. If the company's EBITDA was $4,000 and depreciation and amortisation was equal to $500, then what were TurkeyJerkey's fixed cash expenses during the same period?

• A) $1,499
• B) $1,999
• C) $5,499
• D) $5,999

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Definitions:

Reaction Formation

A psychological defense mechanism where an individual behaves in a manner opposite to their actual feelings or impulses often due to guilt or societal pressures.

Five-Factor Model

A model that outlines five broad dimensions of human personality: openness, conscientiousness, extraversion, agreeableness, and neuroticism.

Agreeableness

A personality trait characterized by compassion, cooperativeness, and a desire to maintain positive social relationships.

Neuroticism

A personality trait characterized by anxiety, fear, moodiness, worry, envy, frustration, jealousy, and loneliness.