If company A has a higher degree of operating leverage than company B, then: company A is more profitable. company A has higher variable expenses. company A is less risky. company A's profits are more sensitive to percentage changes in sales.
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If company A has a higher degree of operating leverage than company B, then:
- company A is more profitable.
- company A has higher variable expenses.
- company A is less risky.
- company A's profits are more sensitive to percentage changes in sales.
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- If company A has a higher degree of operating leverage than company B, then: Multiple Choice company A is more profitable. company A's profits are more sensitive to percentage changes in sales. company A's variable expenses are high. company A is less risky.If a firm's marginal revenue is smaller than its marginal cost, then the firm should collect additional information before taking any action. increase output to increase profit. keep output the same decrease output to increase profit.19. If company A has a higher degree of operating leverage than company B, then: Multiple Choice a)company A's profits are more sensitive to percentage changes in sales. b)company A is less risky. c)company A's variable expenses are high. d)company A is more profitable.
- When sales volume increases, which company will experience a larger percentage increase in profit: company X, which has mostly fixed expenses, or company Y, which has mostly variable expenses?Which of the following statements about operating leverage is false? O a. If the degree of operating leverage higher for a company, this means that the company is more riskyt another company with low degree of operating leverage. O b. Keeping all factors constant, the higher the contribution margin, the lower the operating leverage. O c. Operating leverage measures how operating income will be affected by changes in sales O d. All of the given answers are true. The degree of operating leverage is higher for comnanies with higher fived costs = here to search - hp %23 6. 7 V 3 4 W E R T' Y 岁 S D F G H K. V M. Σ 00 近Consider the following statements: 1. Businesses that are capital intensive tend to have high operating gearing. 2. Businesses with relatively high total variable cost compared with their total fixed cost, at their normal level of activity, are said to have high operating gearing. Are the above statements true or false?
- Which of the following statements about operating leverage is false? O a. All of the given answers are true. O b. Keeping all factors constant, the higher the contribution margin, the higher the operating leverage. OC. Operating leverage measures how operating income will be affected by changes in sales O d. If the degree of operating leverage higher for a company, this means that the company is more risky than another company with low degree of operating leverage. The degree of operating leverage is higher for companies with lower fixed costs O e.The profit maximizing condition for a purely competitive firm is when. Price elasticity of demand is positive. Price average total costs O Price - average total costsWhich of the following statements about operating leverage is false? a. Operating leverage measures how operating income will be affected by changes in sales b. The degree of operating leverage is higher for companies with lower fixed costs c. Keeping all factors constant, the higher the contribution margin, the higher the operating leverage. d. All of the given answers are true. e. If the degree of operating leverage higher for a company, this means that the company is more risky than another company with low degree of operating leverage.
- In competitive markets economic profit becomes zero in the long-run. However, it is also possible for some firms to earn a greater accounting profit and to enjoy a higher producer surplus than other firms. How is it possible? Explain in detail. explain it examplesWhen a Dupont analysis reveals that a company has much higher than average asset turnover and much lower than average profit margin, what can be concluded about the companys strategy? a. It is a product differentiator. c. It has no strategy. b. It needs to concentrate on improve- d. It is a low-cost provider ing its profit margins.Firms with a high degree of operating leverage: will have a more significant shift in income as sales volume changes have lower fixed costs have low contribution margin ratio are less dependent on volume to add profits