Which of the Following Statements Is True

question 6

Multiple Choice

Which of the following statements is true?

• A) The degree of pretax cash flow operating leverage remains same for any level of revenue.
• B) The higher the proportion of fixed costs to variable costs in a project, the greater the sensitivity of pre-tax operating cash flows to changes in revenue.
• C) Depreciation and amortization are deducted to get pretax operating cash flows.
• D) The lower the proportion of fixed costs to variable costs in a project, the more pre-tax operating cash flows will vary as revenue varies.

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Definitions:

Rewards

Incentives or benefits provided to individuals or groups as recognition for their achievements, effort, or behavior, aimed at motivating continued performance.

Merit Pay System

A compensation strategy that rewards employees based on their job performance, typically involving evaluations and performance metrics to determine pay increases.

Pay Increases

Adjustments to salary or wages to enhance an employee's compensation.

Performance Contributions

The measurable output or results produced by an employee that contribute to the organization's objectives.