If the Degree of Accounting Leverage Is 1

question 64

Multiple Choice

If the degree of accounting leverage is 1.3 for a firm, then a 10 percent increase in revenue should drive a

• A) 13% increase in pretax operating cash flows.
• B) 13% increase in EBIT.
• C) 30% increase in EBIT.
• D) none of the above.

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Definitions:

Future Contact

The anticipation or arrangement of an interaction or meeting that will occur at a later date.

Social Script

A guide or schema for behavior in specific social situations, indicating the appropriate sequences of events and actions.

Culturally Modeled Guides

Frameworks or patterns socially and culturally established for influencing behavior, thoughts, and values in a given society.

Mirror Image

A reflected duplication of an object that appears almost identical but is reversed in the direction perpendicular to the mirror surface.