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Author Question: Operating leverage is measured as the responsiveness of the firm's earnings before interest and ... (Read 53 times)

stevenposner

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on: Jul 10, 2018
Operating leverage is measured as the responsiveness of the firm's earnings before interest and
  taxes relative to fluctuations in sales.
 
  Indicate whether the statement is true or false

Question 2

Using the percent of sales method and assuming that no excess capacity exists, a 20 increase in
  sales will result in
 
  A) a 20 increase in total liabilities.
  B) a 20 increase in total assets.
  C) a 20 increase in the company's profit margin.
  D) a 20 increase in retained earnings.
Foundations of Finance ¦ Keown, Petty, Martin ¦ 9th Edition
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karmakat49

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Reply #1 on: Jul 10, 2018
Answer to Question 1

TRUE

Answer to Question 2

B


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