QUESTIONS An average collection period in excess of the industry average may indicator 1. Bad debt write-offs may decreano. 2. Credit terms are liberal 3. Current assets are too small 4 the balance sheet value of roolvables is over-stated, QUESTION The degree of operating leverage (DOL) has which of the following characteristics? 1. the firm has NO debt, then the DOL will equal to 1. 0 2. A change in quantity demanded will produce the same percentage change in EBIT as a le change in price per unit of output, other things hold constant 3. 3 The DOL. relates the change in net income to the change in operating incomo. 4. The higher the fixed conts, the higher the DOL