The degree of operating leverage has which of the following characteristics?
A) A change in quantity demanded will produce the same percentage change in EBIT as an identical change in price per unit of output, other things held constant.
B) The DOL relates the change in net income to the change in operating income.
C) If the firm has no debt, the DOL will equal 1.
D) The closer the firm is operating to the breakeven quantity, the smaller the DOL.
E) The DOL is not a fixed number for a given firm, but will depend upon the time zero values of the economic variable Q (Quantity) , P (Price) , and V (Volume) .
Correct Answer:
Verified
Q1: PQR Manufacturing Corporation has $1,500,000 in debt
Q2: Which of the following statements is CORRECT?
A)
Q4: The use of financial leverage by the
Q5: Your firm's EPS last year was $1.00.
Q6: Assume that a firm currently has EBIT
Q7: Which of the following statements is CORRECT?
A)
Q8: Coats Corp. generates $10,000,000 in sales. Its
Q9: A company currently sells 75,000 units annually.
Q10: Assume that a firm has a degree
Q11: Stromburg Corporation makes surveillance equipment for intelligence
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents