P company is a labor intensive company and on the contrary, Q company is heavily capital-intensive company. 'Which of the following statement is true to above case? P company will have higher contribution margin per unit. Q company will have higher contribution margin per unit. P company will have higher break-even point. Q company will have higher break-even point.

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you are the owner of a firm, and your firm is experiencing "economies of scale" in production. If this is the case, will the average total cost increase, decrease or remain unchanged as you increase the level of output?

The lower the MARR (minimum attractive rate of return), the higher the price that a company should be willing to pay for equipment that reduces annual operating expenses. A) True (B) False

In general, a firm with low operating leverage also has a small proportion of its total costs in the form of variable costs. T/F True False

A firm can reduce its breakeven volume by: decreasing fixed costs. B) decreasing contribution margin. Jy C increasing variable costs. lowering selling price.

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 NOT true? Group of answer choices Operating leverage predicts the effect of fixed costs on operating income when sales volume changes. A higher proportion of fixed cost in a cost structure results in higher operating leverage. The higher the operating leverage, the higher the risk of loss when sales volume decreases. A higher proportion of fixed cost in a cost structure results in lower operating leverage.

(7.10) For a given level of output, DOL (increases/decreases/remains constant) as the size of the increase in Q increases. When the base level of Q increase, the DOL (increases/decreases/remains constant). A capital-intensive production process has a (higher/lower) DOL than a less capital-intensive process, so that OCF and NPV increase (more/less) rapidly with an increase in sales; if sales are below the forecasted level, then NPV decreases (more/less) rapidly for the capital-intensive process. goits

Degree of operating leverage (DOL) measures the sensitivity of OCF in response to changes of The higher the DOL, the the volatility of a firm's operating income. Select one: a. sales quantity; lower O b. sales quantity; higher O c. fixed costs; lower O d. fixed costs; higher O e. variable costs; higher