The higher the degree of operating leverage, the lower is the risk of forecasting error.

Name: The higher the degree of operating leverage, the lower is the risk of forecasting error.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

A higher degree of operating leverage indicates a greater proportion of fixed costs in the business structure, which amplifies the impact of sales volume changes on profits, thereby increasing the risk of forecasting error.

The Higher the Degree of Operating Leverage, the Lower Is