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1) Which one of the following statements is FALSE regarding operating leverage? A- A company that has a high DOL has a high business risk.
1) Which one of the following statements is FALSE regarding operating leverage? A- A company that has a high DOL has a high business risk. B-DOL is a measure of sensitivity of a firm's EBIT to a change in sales. C- The higher the DOL, the closer the company to its break-even point. D- Operating leverage mainly focus on the use of variable operating costs by a company. E- Other: 2) A company produces polyester only. Fixed costs are 10.000 $. Break-even sales amount of polyester is 120.000 $. Sales price is 10 $/kg. What is the unit contribution margin at the break-even point? A-0,63 $ B-0,73 $ C-0,83 $ D-0,93 $ E-Other
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