Multiple Choice
A firm has an operating leverage factor of 4. This means that
A) if sales revenue increased by 2 per cent, profit would increase by 4 per cent.
B) if sales revenue increased by 2 per cent, profit would increase by 8 per cent.
C) if sales revenue increased by 2 per cent, profit would increase by 2 per cent.
D) profit would increase by 4 times the dollar increase in sales revenue.
Correct Answer:
Verified
Correct Answer:
Verified
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