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Operating leverage measures ____________.
- Abusiness risk
- Bfinancial risk
- Cboth risks
- Dproduction risk
Correct answer: A
Discussion 1
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CCommunity
business risk
Operating leverage measures a company’s fixed costs as a percentage of its total costs. It is used to evaluate the break-even point of a business, as well as the likely profit levels on individual sales.
Operating leverage measures a company’s fixed costs as a percentage of its total costs. It is used to evaluate the break-even point of a business, as well as the likely profit levels on individual sales.