Which of the following refers to the measurement of the impact of change in purchase spend on a firm's profit before taxes, assuming gross sales and other expenses remain unchanged?
A) Break-Even Analysis
B) Profit-Leverage Effect
C) Direct Offset
D) Leveraging Purchase Volume

Question

Quizplus · Accepted Answer

The measurement of the impact of change in purchase spend on a firm's profit before taxes, assuming gross sales and other expenses remain unchanged is referred to as the Profit-Leverage Effect. It helps businesses understand how changes in their purchasing activity can impact their overall profitability. A higher profit-leverage effect indicates that small changes in spending can have a significant impact on profits.

Which of the Following Refers to the Measurement of the Impact