Calculating Operating Leverage

question 63

Multiple Choice

Calculating operating leverage. TurkeyJerkey Dried Meats, Inc., had a degree of accounting operating leverage equal to 1.714 during the most recent period. If the firm's EBITDA was $4,000 and depreciation and amortization was equal to $500, then what was TurkeyJerkey's fixed cash expenses during the same period?

• A) $1,499
• B) $1,999
• C) $5,499
• D) $5,999

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Definitions:

Closely Linked

Having a very strong relationship or connection between two or more things.

Doctrine

A belief or set of beliefs held and taught by a church, political party, or other group.

Violent Methods

Approaches or actions that involve physical force intended to hurt, damage, or kill someone or something.

Shark-Infested Waters

Used metaphorically to describe a situation full of dangers and risks, or, literally, waters that have a high population of sharks.