Taxes Do Not Enter into the Equation for the Degree

question 38

True/False

Taxes do not enter into the equation for the degree of cash flow of operating leverage because both fixed costs and pretax operating cash flows are measured on a pretax basis.

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Definitions:

Economic Expansion

A period of increased commercial and industrial activity within an economy, marked by rising GDP, employment, and productivity.

Standard Of Living

The level of wealth and material comfort that people have available to them.