Calculating Operating Leverage

question 25

Multiple Choice

Calculating operating leverage. Marvelous Corporation has a degree of cash flow operating leverage equal to 1.25. If the firm's EBITDA was $1,000 last year while its depreciation and amortization expense was $50 in the same year, then what was the firm's degree of accounting operating leverage?

• A) 1.26
• B) 1.30
• C) 1.32
• D) 1.35

Determine the equivalence of cash flows at different time periods using interest rates.

Calculate and apply compound interest rates to savings and investment scenarios.

Understand the concept of compound interest and how it affects savings and investments.

Calculate future values of single sums and annuities with different compounding frequencies.

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Definitions:

Stepwise Regression

A method of regression analysis in which variables are added or removed from a multivariable model in a step-by-step fashion based on statistical criteria.

F-statistic

A ratio used in statistical analysis to compare the variance across different groups to evaluate the significance of relationships between variables in a linear model.

P-value

A statistical measure that helps scientists and researchers determine the significance of their research results.

Odds Ratio

A measure of association between an exposure and an outcome, representing the odds that an event will occur given the exposure vs. the odds of the event occurring without the exposure.