All categories

3 years ago

What is meant by the term operating leverage?

Business

1 answer:

ludmilkaskok [199]3 years ago

8 0

The percentage of fixed costs in a company's cost structure.

You might be interested in

You are evaluating a project that will cost $500,000, but is expected to produce cash flows of $125,000 per year for 10 years, w

boyakko [2]

Answer:

1. 4 years

2. No

Explanation:

Payback period calculates the amount of time to recoup the total investment made on a project. It calculates how long the cash flows generated from a project would cover the cost of the project.

The cost of the project is $500,000

Cash flows are $125,000 per year for 10 years.

In the first year, the cost of the project is reduced by $125,000 and becomes $375,000.

In the second year, the cost of the project is reduced by $125,000 and becomes $250,000.

In the third year, the cost of the project is reduced by $125,000 and becomes $125,000.

In the fourth year, the cost of the project is reduced by $125,000 and becomes $0.

The cost of the project is totally recouped in the 4th year. therefore, the payback period is 4 years.

But the company has a preferred payback period of 3 years ,therefore , the firm won't undertake the project because the payback period is more than 3 years.

3 0

3 years ago

The general services administration (gsa was set up as an independent agency _____.

ahrayia [7]

To Take care of the construction and operation of public buildings

3 0

3 years ago

Read 2 more answers

If the margin of safety is 0, then a.the margin of safety cannot be less than or equal to 0; it must be positive. b.the company

sdas [7]

Answer:

d.the company is precisely breaking even.

Explanation:

Margin of safety is referred to current sales - Break even sales ratio to current sales as a percentage.

Basically it is quoted as follows:

$\frac{Current\ sales\ -\ Break-even\ Sales}{Current\ Sales} \times 100$

Therefore, when the current sales = Break even sales then only the company will have margin of safety = 0

Thus, at 0 margin of safety the company basically is at no profit no loss situation, that is break even.

3 0

3 years ago

Ordinary and necessary business expenses are deductible only to the extent they are also reasonable in amount.

marysya [2.9K]

Answer:

True

Explanation:

According to the IRS:

ordinary expenses are expenses that are common and accepted in a company's trade or industry.
necessary expenses are expenses that help your company carry on its normal business.

Tax deductible expenses must be ordinary, necessary, and reasonable.

8 0

3 years ago

According to the tutorial, which is the most significant tax local governments rely on to generate revenue?

kirill115 [55]

I believe it is B property tax

8 0

3 years ago