Question: Question 1. True or false. why? Operating leverage is used as a measure of the sensitivity of profits to changes in sales. High operating leverage

Question 1. True or false. why?

Operating leverage is used as a measure of the sensitivity of profits to changes in sales.

High operating leverage results in low volatility of profits

High degree of operating leverage provides significantly higher profits when sales are increasing.

Companies with higher proportion of fixed costs in their cost structure tend to have higher degrees of operating leverage.

Management of companies can sometimes influence its degree of operating leverage.

McDonalds is likely have a higher degree of operating leverage than Volkswagen.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Q:

kindly give me the true-false answer, please. if you are not sure please don't take this Question 1 (TRUE or FALSE?) Current assets normally include fixed assets such as buildings, land, and...

Q:

D Question 5 , 3 pts Which of the following is true? The degree of operating leverage measures the sensitivity of sales to changes in profits Firms with lower proportion of fixed costs have lower...

Q:

Prepare a contribution format income statement for Chipotle for 2017 . When preparing this statement: (1) include each line (with a dollar amount) from the income statement and (2) do not go below...

Q:

For the below, make the following assumptions (except where noted in the questions below): All tables provided. D = 0.2 (both for Media General and the media companies in Exhibit 12) The market...

Q:

See page 129- 137 on attachment for more details there are five steps to the project. Step 1: Create the loan amortization schedule for the property. Step 2: Create the depreciation schedule. Step 3:...

Q:

Could you answer question 1 1.Calculate the expected value, standard deviation, and the coefficient of variation of KTs ROE with the sales figures for the current year. Part 1: GOODWEEK TIRES, INC. :...

Q:

Do a financial analysis of Beyond Meat. What is your assessment of Beyond Meats financial performance? What finance-related strengths and weaknesses do you see? Use the financial ratio data in...

Q:

Q1. Which of the following has the most significant influence on return on equity? a. Common dividends b. Principal payments c. Accruals d. Operating income Q2. Shareholders react to poor investment...

Q:

SHR CASE STUDY The following case study has 2 parts (Part A & B). Complete all requires of these 2 parts typed/double-spaced/12-font in 5 pages or less Background Information SHR Corporation (SHR) is...

Q:

What factors should be considered in deciding whether the cost of capital for a foreign affiliateshould be higher, lower, or the same as the cost of capital for a comparable domestic operation?...

Q:

The management of Trident, Inc. is trying to determine if three of the company's nonreportable segments should be combined into one single segment for reporting purposes. In what five ways must these...

Q:

Repeat Problem 9.5 for a 1-m-long half-wave dipole that operates in the FM/TV broadcast band at 150 MHz.

Q:

Question 1 1 * 1 point Beatrice invests $ 1 . 4 6 0 in an account that pays 5 percent simple interest. How much more could she have earned over a 6 - year period if the interest had been compounded...

Q:

Questions Q1. Write a Python program to retrieve the first and last colors from the following list: color_list = ["red", "green", "white", "blue", "black") Q2. Given the following dictionary,...