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nikklg [1K]
3 years ago
13

The degree of operating leverage at a specific level of sales helps the managers calculate the effect that potential changes in

sales will have on operating income. true or false
Business
1 answer:
Zarrin [17]3 years ago
5 0

Answer: TRUE

Explanation:

The DEGREE OF OPERATING LEVERAGE (DOL) is a ratio that measure just how much operating income will change if there is a change in sales.

The formula is the % change in EARNINGS BEFORE TAX/ % change in SALES.

This measure therefore assists analysts in estimating the impact of any change in sales in a company.

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Summary financial information for Paragon Company is as follows. Dec. 31, 2014 Dec. 31, 2013 Current assets $ 203,600 $ 254,000
beks73 [17]

Answer:

Current assets:

Amount = 2014 value - 2013 value

             = $203,600 - $254,000

             = -($50,400) (Negative)

percentage changes = \frac{Amount}{2013\ value}\times100

                                    = \frac{50,400}{254,000}\times100

                                    = (19.84)%

Plant assets:

Amount = 2014 value - 2013 value

             = $1,397,000 - $831,700

             = $565,300

percentage changes = \frac{Amount}{2013\ value}\times100

                                    = \frac{565,300}{831,700}\times100

                                    = 67.96%

Total assets:

Amount = 2014 value - 2013 value

             = $1,600,600 - $1,085,700

             = $514,900

percentage changes = \frac{Amount}{2013\ value}\times100

                                    = \frac{514,900}{1,085,700}\times100

                                    = 47.42%

6 0
2 years ago
The location-specific advantages argument associated with John Dunning helps explain why firms prefer FDI to licensing or to exp
harkovskaia [24]

Answer:

false

Explanation:

False. The location-specific advantages argument associated with John Dunning does help explain the direction of FDI. However, the location-specific advantages argument does not explain why firms prefer FDI to licensing or to exporting.

quizlet

8 0
2 years ago
Q1. As the economy nears the end of an expansion, which of the following typically occurs? A. Wages are usually rising faster th
vazorg [7]

Answer:

D

Explanation:

5 0
3 years ago
In this blank graph of the business cycle, what does the red circled area on the grap
serg [7]

Answer:It is contraction

Explanation:It is at the smallest point

6 0
3 years ago
A loan officer will use _____ to determine if you will be approved for a loan.
Georgia [21]
The correct answer would be : The Four C's Of Lending

I hope that this helps you !
6 0
3 years ago
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