QUESTION 16 A company has high operating leverage when: A small percentage changes in revenue produce large percentage changes in profit. OB. a company utilizes debt to finance its assets. OC. the organization makes purchases on credit instead of paying cash. O D.management buys enough of the company's shares of stock to take control of the corporation. QUESTION 17 Select the incorrect statement regarding upstream and downstream costs. OA. Upstream and downstream costs are reported as product costs on the income statement OB. To be profitable, companies must recover the total cost of developing, producing, and delivering products. O Pricing decisions must consider both upstream and downstream costs in addition to manufacturing costs. D. Companies normally incur significant downstream costs. QUESTION 18 Executive management at Shoeshiners Incorporated is very optimistic about the chain's ability to achieve significant increases in sales in each of the next five years. The company will generate the most net income if management creates a: A. low operating leverage cost structure. OB. high operating leverage cost structure. OC. medium operating leverage cost structure. OD. no operating leverage cost structure