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Which of the following is TRUE regarding operating leverage? A high operating leverage indicates the company is doing well. Companies with high operating leverage should
Which of the following is TRUE regarding operating leverage?
A high operating leverage indicates the company is doing well. | ||
Companies with high operating leverage should save during profitable years to cover the costs of years when sales are low. | ||
Companies with low operating leverage have high fixed costs but lower variable costs.
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Operating leverage decreases the sensitivity of the firm's operating income to the change of sales. |
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