AFP
CTP · Question #249
(Topic 3) Which of the following would be true for a company with high operating leverage?
The correct answer is C. If revenues increase marginally, it can achieve a large percentage increase in profits. See the full explanation below for the reasoning.
Question
- (Topic 3)
Which of the following would be true for a company with high operating leverage?
Options
- AIts cost of goods sold does not increase as revenues increase.
- BIt has high variable costs per unit sold.
- CIf revenues increase marginally, it can achieve a large percentage increase in profits.
How the community answered
(41 responses)- A7% (3)
- B20% (8)
- C73% (30)
Community Discussion
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