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Would the profit change associated with sales changes be larger or smaller if a firm increased its operating leverage?
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- Changes in sales cause changes in profits. Would the profit change associated with sales changes be larger or smaller if a firm increased its operating leverage? Explain your answer.What is AAA Corp.’s projected degree of operating leverage based on the projected sales?Suppose a company’s return on invested capital is less than itsWACC. What happens to the value of operations if the salesgrowth rate increases?
- A company cannot be increasing its market share if its net sales are decliningSuppose a company’s return on invested capital is less than itsWACC. What happens to the value of operations if the salesgrowth rate increases? Explain your answer.suppose a company's return on invested capital is less than its wacc. what happens to the value of operations if the sales growth increases? Explain your answer
- Is it possible for a firm to have price-earnings ratio that is higher than other similar firms? Why or why not?how to assess a company's success in using leverage to increase returns?Which of the following is consistent with an increase in a firm's return on investment? a. an increase in the asset level required to maintain current sales volume b. costs decrease less than revenues do c. costs increase more than revenues do d. an increase in sales revenue
- Suppose a company increases the price of its product and demand hardly declines.which of the following will increase? A) profit margin B) return - on - equity C) taxes D) all the aboveDiscuss how market characteristics can influence the profit rate of a perfectly competitive market firm in the short term and long term.If a sales increase is forecasted, how will it affect expenses on the pro forma income statement if market conditions are expected to remain stable