Question

In: Finance

An increase in fixed operating costs will result in ________. a.) a decrease in the degree...

An increase in fixed operating costs will result in ________.

a.) a decrease in the degree of operating leverage

b.) an increase in the degree of operating leverage

c.) an increase in the degree of financial leverage

d.) a decrease in the degree of financial leverage

Solutions

Expert Solution

Ans b.) an increase in the degree of operating leverage

An increase in fixed operating costs will result in an increase in the degree of operating leverage. There will be impact on operating leverage, and no impact on financial leverage.


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