If a Firm Has a Degree of Operating Leverage (DOL)

If a firm has a degree of operating leverage (DOL) that is greater than 1.0, then it means that a 1.0 percent change in _____ will cause a change in earnings before interest and taxes (EBIT) that is _____ 1.0 percent.

A) earnings per share; greater than
B) net income; greater than
C) net operating income; less than
D) sales; greater than
E) fixed costs; less than

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