Question: Which of the following is INCORRECT regarding operating leverage? A. It increases the sensitivity of the firms operating income to changes in sales. B. It

Which of the following is INCORRECT regarding operating leverage?
  • A. It increases the sensitivity of the firms operating income to changes in sales.
  • B. It results from operating costs and do not vary with the level of firm sales.
  • C. A higher operating leverage means higher volatility in EBIT.
  • D. A lower operating leverage means a lower financial leverage.
  • E. All of the above is correct.

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