Firm A employs a high degree of operating leverage; Firm B takes a more conservative approach. Which of the following comparative statements about firms A and B is true?

A. A has a lower break-even point than B, but A's profit grows faster after the breakeven.

B. A has a higher break-even point than B, but A's profit grows slower after the breakeven.

C. B has a lower break-even point than A, but A's profit grows faster after the breakeven.

D. B has a lower break-even point than A, and profit grows the same rate for both companies after the break-even point.

Answer rating: 100% (QA)

ANSWER C The comparative statements about firms A and B is true ie B has a low... View the full answer