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1 year ago

Operating leverage is the smallest at sales levels near the break-even point and increases as sales and profits rise.

Business

1 answer:

Yakvenalex [24]1 year ago

6 0

False, Degree of operating leverage is largest at break even

Does operating leverage increase as profit increases?

The more profit a company can squeeze out of the same amount of fixed assets, the higher its operating leverage.

What is meant by operating leverage?

Operating leverage occurs when a company has fixed costs that must be met regardless of sales volume. When the firm has fixed costs, the percentage change in profits due to changes in sales volume is greater than the percentage change in sales.

How does operating leverage affect break-even point?

To make a profit, the price must be higher than the break-even point. A company with a high operating leverage, or a higher ratio of fixed costs to variable costs, always has a higher break-even point than a company with a low operating leverage.

Is high or low operating leverage better?

Generally speaking, high operating leverage is better than low operating leverage, as it allows businesses to earn large profits on each incremental sale. Having said that, companies with a low degree of operating leverage may find it easier to earn a profit when dealing with a lower level of sales.

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Your financial investments consist of U.S. government bonds maturing in twenty years and shares in a start-up internet company.

Alexxandr [17]

Answer:

Decrease, Decrease

Explanation:

From the question we are informed about my financial investments which consist of U.S. government bonds maturing in twenty years and shares in a start-up internet company. In the case whereby the interest rates on newly-issued government bonds increase, then the price of my bonds will decrease and the price of the shares you own will decrease. Financial investment can be regarded as asset which one put money on hoping that there will be growth of the asset and the asset will appreciate to sum of money larger than the asset. Bond is an example of this, a bond can be explained as fixed income instrument which is a representation of a loan that is set up by an investor given out to a borrower. This borrower could be governmental or Corporate.

The Owners of bonds could be

debtholders as well as creditors of the firm that issue it i.e the issuer. Details of bonds is " end date"

7 0

2 years ago

Select the correct answer.

evablogger [386]

Answer:

с. Purchases and Creditors

<u>Multiple choices</u>

A. Goods and Cash

В.Goods and Creditors

с. Purchases and Creditors

D.Purchases and Cash

Explanation:

The purchase account is used to record purchased goods. Accountants and bookkeepers usually do not operate a goods account. When goods are purchased, they increase the purchases account.

Purchased goods are either paid in cash or on credit. Cash purchases reduce cash held in the business and are recorded in the cash account. Credit purchases increase liabilities and are recorded in the creditor's accounts.

4 0

2 years ago

Consider an economy described by the combined solow and romer model. if this economy is on its balanced growth path when an exog

astraxan [27]

This economy is on its balanced growth path when an exogenous permanent increase in the depreciation rate occurs, there will be an immediate growth effect.

Recall that population growth in the Solow model does not contribute to per capita income growth, which depends solely on the growth of (exogenous) technology. in Romer's model, population growth could be the source of her per capita income growth.

In the short run, increased savings and investment boost national income and output growth. Solow analyzes how increased savings and investment affect long-term economic growth. In the short run, higher savings and investment lead to higher national income and output growth in the short run.

The Solow growth model is an exogenous model of economic growth that analyzes changes in an economy's output levels over time as a result of changes in the rate of population growth, savings, and technological progress.

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6 0

1 year ago

Current news and politics is full of concern about the environment, particularly as it is related to oil use and the auto indust

alina1380 [7]

Answer:

It is true that raising gasoline prices (either by producing less of it, or by adding taxes) would reduce gasoline use. The concept of price elasticity of demand can helps us explain why.

Explanation:

A good can be either elastic or inelastic depending on its price elasticity of demand. A price elasticity of demand of less than 1 is considered inelastic, while a price elasticity of demand higher than 1 is considered elastic.

Elastic goods are those whose quantity demanded falls or rises more than the price. Inelastic goods are those whose quantity demanded falls or rises less than the price.

Gasoline is a inelastic good in the short-term because even with a price hike, most people will still buy gasoline because they need to move around. However, in the long-term, gasoline becomes more elastic because people replace their buy electric cars, or cars that use less fuel, etc.

What this tells us is that raising gasoline prices can reduce gasoline use in the long-term.

A built-in injustice in this measure is that it affects the poor disproportionally. Poor people also need cars to get around, and a rise in the gasoline price means that they have less money for other basic needs.

8 0

2 years ago

What type of consumer debt is the largest in the united states

ankoles [38]

Hi !!

The largest consumer debt concerns home mortgage.

it has gone up to 9,14 trillions.

In second place comes student loans

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7 0

3 years ago