Which of the following statements about operating leverage is false?

Q: Which of the following is not one of the benefits of breakeven analysis to businesses? A.…

A: A break-even analysis is a financial tool

Q: Why would a company want to know their operating leverage when they can already calculate the number…

A: Degree of operating leverage means the division of contribution with operating income. Number of…

Q: Neptune Corporation wants to decrease its operating leverage. Which of the following results can the…

A: Operating leverage can be referred to as an accounting measure that determines the impact of revenue…

Q: Which of the following situations is most likely to pose a problem for companies that use return on…

A: Return on investment is computed as the average return generated dividend by the investment made in…

Q: Which of the following is not an assumption underlying cost-volume-profit analysis? a. The sales mix…

A: Solution: Introduction: Cost Volume Profit (CVP) Analysis describes how changes in costs, expenses…

Q: Which of the following statements about operating leverage is false? O a. If the degree of operating…

A: Answer

Q: Is this situation consistent with a monopolistically competitive firm maximizing profit? If yes, is…

A: Market Economy- A market economy is an economic system in which market forces, rather than a central…

Q: On a CVP graph for a profitable company, the total revenue (sales) line will be steeper than the…

A: Cost volume profit analysis: It can be defined as the technique of accounting that is used by the…

Q: If a firm is using financial leverage successfully, the ROE should be a. higher than the profit…

A: Answer is option b) Higher than ROA Financial leverage = Earnings Before Interest and Taxes /…

Q: In a multi-product company, as the mix of the products being sold changes, the overall contribution…

A: Overall contribution margin is the mix of individual contribution margin with the weights of their…

Q: Is my explanation correct? When the shit in sales toward the lower contribution margin.  In the…

A: Dear student your explanation is correct. In the sales mix, if the shift in sales to a product that…

Q: What is the concept of operating leverage? Describe a scenario where a high degree of operating…

A: Solution- Operating leverage is the a degree to which a firm uses variable and fixed costs in…

Q: The trend for cost of goods sold is it is decreasing as a percentage of sales and the trend for…

A: CVP analysis is used to analyze the impact of changes in sales volume on costs and operational…

Q: Break-even analysis is concerned with determining a point at which the company can minimize total…

A: Break-even point is the point reached by the company where the revenues and costs of the firm are in…

Q: Which of the following situations is most likely to pose a problem for companies that use return on…

A: Solution Concept Return on investment               Return on investment means the return the…

Q: Break-Even Point AnalysisThe break-even point is usually expressed as the amount of revenue that…

A: Hello. Since your question has multiple parts, we will solve the first question for you. If you want…

Q: Which of the following statements is true? A In linear break-even analysis, the contribution margin…

A: As per the linear break-even model, the contribution margin per unit is the difference between the…

Q: In all respects, Company A and Company B are identical except that Company A’s costs are mostly…

A:

Q: For an enterprise, when at least one input is held constant while other inputs are increased, there…

A: The question is based on concept to establish relationship between input and change in input with…

Q: true or false The smaller the contribution margin ratio, the larger the amount of sales required to…

A: Contribution margin ratio: The contribution margin represents the incremental cash generated for…

Q: A firm with a high degree of operating leverage: " will have a more significant shift in income as…

A: Degree of Operating Leverage is a relation of contribution margin to the net income.  Contribution…

Q: If company A has a higher degree of operating leverage than company B, then: Multiple Choice…

A: SOLUTION- Higher fixed costs lead to higher degrees of operating leverage; a higher degree of…

Q: If company A has a higher degree of operating leverage than company B, then: company A is more…

A: OPERATING LEVERAGE IS THE DEGREE TO WHICH A FIRM OR PROJECT CAN INCREASE INCOME BY INCREASING…

Q: If company A has a higher degree of operating leverage than company B, then: Multiple Choice…

A: Formula to compute operating leverage is as follows: Operating leverage =% change in EBIT% change in…

Q: better the company’s future performance. Do you agree o

A: Operating Leverage Operating leverage measures a company’s fixed costs as a percentage of its total…

Q: operating leverage factor t

A: Operating leverage factor = (Sales - Variable costs)/(Sales - Variable costs) - Fixed costs

Q: Consider the following​ statements:      1. Businesses that are capital intensive tend to have high…

A: Lets understand the meaning of operating gearing. Operating gearing reflect the relation ship…

Q: Compared to companies that have a cost structure that is mainly comprised of fixed costs, companies…

A: Operating income shows that how revenue leads to growth in operating income. It is a tool to measure…

Q: Firms with a high degree of operating leverage:

A: Degree of operating leverage is a measure that determines the quantum of change in a company's…

Q: The relevant range of activity is the activity level at which the company makes the highest amount…

A: Fixed cost does not change with the change in output whereas, variable cost changes with the change…

Q: Which of the following statements about operating leverage is false? O a. If the degree of operating…

A: Operating Leverage = %change in EBIT / % change in sales

Q: Corning’s market value was below its book value because it was facing pricing pressure in the…

A: The price pressure hypothesis (PPH) predicts that shocks will have a temporary effect on prices…

Q: Which of the following statements about operating leverage is false? O a. All of the given answers…

A: Degree of operating leverage means the division of contribution with net income. It means that how…

Q: Which statement is incorrect? We cannot use profitability to value Coca Cola because it has negative…

A: Specific reasons behind the negative earnings: This includes the strike through of an employee of…

Q: Which of the following statements concerning performance evaluation tools used in decentralized…

A: Performance evaluation means when actual performance is being compared with the budgeted numbers and…

Q: The amount by which a company's sales can decline before losses are incurred is called the: degree…

A: Cost-Volume-Profit (CVP) analysis is a management tool which establishes the relationship between…

Q: Which of the following is TRUE of asset betas? O a. Asset betas are expected to vary greatly within…

A: Asset beta measures the market risk or systematic risk of the stock or firm without the impact of…

Q: Help question 30

A: The contribution margin ratio shows the percentage of each dollar sales that is available for…

Q: Which of the following statements about operating leverage is false? O a. Keeping all factors…

A: Operating leverage: It is a cost account accounting method or technique used by the firm to measure…

Q: Under which of the following conditions could the overuse of financial leverage be detrimental to…

A: Financial leverage is more use of debt which continous payment of interest rather than issues of…

Q: In competitive markets economic profit becomes zero in the long-run. However, it is also possible…

A: Economic profits and losses play a crucial role in the model of perfect competition. The existence…

Q: Compared to companies that have a cost structure that is mainly comprised of variable costs,…

A: Ans. Mostly companies incur two types of cost - Variable cost or fixed cost. Variable cost changes…

Q: 1) Which of the following statements describes the force that drives the distribution of resources…

A: Free enterprise economy is the system of economy which is control by market forces which are demand…

Q: Which of the following is not an assumption of break-even analysis? a. A company is operating within…

A: Break-Even Point:  It is the point of sales at which entity neither earns a profit nor suffers a…