Define operating leverage and explain why a highly leveraged company may be risky.
Question:
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 89% (19 reviews)
Operating leverage is a firms ratio of fixed to variable costs ...View the full answer
Answered By
Kennedy Odhiambo
As a professional writer, I have been in the field for over 5 years having worked as a lecture in different tertiary institutions across the world. With this impeccable experience, I assure provision of a good and supporting environment for students to learn.
5.00+
2+ Reviews
10+ Question Solved
Related Book For
Introduction to Management Accounting
ISBN: 978-0133058789
16th edition
Authors: Charles Horngren, Gary Sundem, Jeff Schatzberg, Dave Burgsta
Question Posted:
Students also viewed these Managerial Accounting questions
-
Define the term operating leverage and explain how it affects profits.
-
Define operating leverage and the degree of operating leverage (DOL). How are the two related?
-
Explain why a highly effective vaccine does not yet exist for malaria. What progress is currently being made today?
-
Calculate the IRR for the following projects. a. An initial outflow of $15,220 followed by inflows of $5,000, $6,000, and $6,500. b. An initial outflow of $47,104 followed by inflows of $16,000,...
-
What is the difference between a direct and an indirect marketing channel for gift baskets? Why might a business use both?
-
What mass of solute is dissolved in the following solutions? (a) 10.0 g of 2.50% K 2 CO 3 solution (b) 50.0 g of 5.00% Li 2 SO 4 solution.
-
Is the level of measurement of the 641 individual responses nominal, ordinal, interval, or ratio? Why? Refer to the table in the margin, which summarizes results from 641 people who responded to a...
-
DataPoint Engineering is considering the purchase of a new piece of equipment for $240,000. It has an eight-year midpoint of its asset depreciation range (ADR). It will require an additional initial...
-
U 2 3 -5 1 1 2 2 4 -2 2 4 1 2 -1 20 Let A = = Which vectors belong to the kernel of A? 3 6 -2 19 5 10 4 59 57 -1 1 0
-
The separation of isopentane from n-pentane by distillation is difficult (approximately 100 trays are required), but is commonly practiced in industry. Using the extended Antoine vapor pressure...
-
Why is break-even analysis a misnomer?
-
The contribution margin and gross margin are always equal. Do you agree? Explain.
-
If an entrepreneurs business finds itself in trouble, what are the options available to the entrepreneur to attempt to remedy the situation?
-
What is the framework or process of operating the Joint Theater Support Contracting Command (JTSCC)?
-
Josh just started his first professional job two weeks ago and his parents have already started encouraging him to start investing. Since he already has a small account open at Vanguard, he decides...
-
Explain the 4 modes of transportation ( air transport, rail transport, road transport, and maritime transport). Explain each with real-world scenarios
-
Mary is 32 and wants to buy her first home .A graduate of the Algonquin school of business - she loved the Investment Planning course J Has $80,000 in RRSPs (RBC Bond Fund), $70,000 in her TFSA (all...
-
A lens with f= +15 cm is in contact with a lens with f = -20 cm. Part A What is the effective focal length of the combination? Express your answer with the appropriate units. feff = Value Submit...
-
Interpret the following symbolized arguments in light of the eight argument forms presented in this section. In some cases a symbolized argument must be rewritten using commutativity or double...
-
The process of collaborative goal setting by a manager and subordinate, the extent to which goals are accomplished is a major factor in evaluating and rewarding the subordinate's performance. It is...
-
Here are data on Japanese exports and imports, for 2012, for the same seven products shown for U.S. trade in Figure 6.2: a. For each product for Japan, calculate the IIT share. b. The weighted...
-
Three categories of requirements are imposed on accounting systems designed to meet the requirements of external users. What are these categories?
-
The field is less sharply defined. There is heavier use of economics, decision sciences, and behavioral sciences. Identify the branch of accounting described in the quotation.
-
Home Town Furnitures incurred losses for the past two quarters. In an immediate rescue measure, the CEO of the company issued instructions to every department to cut costs. Accordingly, the packaging...
-
Government spending in Robok is $140 billion, and its only tax is an income tax with a marginal tax rate of 0.2. a. The balance on the government's budget at a GDP level of $450 billion is a (Click...
-
Answer each question in at least one paragraph, where each paragraph would have at least more than 10 lines and provide justification to your answers with some references and some articles. Can a...
-
1. Use the mmls command to display the partition table of the DD image provided. 2. What is the starting sector number for the NTFS partitions? 3. Display the partition contents of both NTFS...
Study smarter with the SolutionInn App