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 risky tha another company with low degree of operating leverage. O b. Operating leverage measures how operating income will be affected by changes in sales O c. All of the given answers are true. O d. The degree of operating leverage is higher for companies with higher fixed costs O e. Keeping all factors constant, the higher the contribution margin, the lower the operating leverage.
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 risky tha another company with low degree of operating leverage. O b. Operating leverage measures how operating income will be affected by changes in sales O c. All of the given answers are true. O d. The degree of operating leverage is higher for companies with higher fixed costs O e. Keeping all factors constant, the higher the contribution margin, the lower the operating leverage.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter12: Fainancial Statement Analysis
Section: Chapter Questions
Problem 44MCQ: When a Dupont analysis reveals that a company has much higher than average asset turnover and much...
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