Calculating Operating Leverage

question 28

Multiple Choice

Calculating operating leverage. Coach K Sneakers, Inc., had EBIT of $1,850 last year with fixed costs equal to $500 (depreciation and amortization not included) and depreciation and amortization equal to $150. What was Coach K's degree of accounting operating leverage?

• A) 1.25
• B) 1.35
• C) 1.38
• D) 1.40

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Definitions:

Avoidance

A defensive or proactive behavior aimed at preventing discomfort, danger, or engaging with stressful situations.

Outcome

An outcome is the result or effect of an action, decision, or situation.

Primary Appraisal

The initial evaluation process where an individual assesses the significance of an event as a threat, challenge, or harm/loss.

Amygdala

A region of the brain within the temporal lobe, associated with experiencing emotions, particularly fear and aggression.