Question: 9. Operating Leverage indicates the degree to which a project (or a firm) has the fixed cost (FC). Specifically, Degree of Operation Leverage (DOL) can

9. Operating Leverage indicates the degree to which a project (or a firm) has the fixed cost (FC). Specifically, Degree of Operation Leverage (DOL) can be measured as follows: % change in OCF=DOL% change in Q DOL=1+FC/OCF where OCF is Operating Cash Flows and Q is quantities unit sales. (* The above box is true. Answer the following proposition.) In general, the higher the operating leverage, the lower the break-even point. [ True / False]

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