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3 years ago

A company with high operating leverage:

Business

2 answers:

BartSMP [9]3 years ago

8 0

Answer: c. has a greater proportion of fixed costs to variable costs

Explanation: Operating leverage is a measure a firm’s fixed costs as a percentage of its total costs. In order words, it measures the amount of debt the firm uses in finance its operations.

A company with high operating leverage is one with a greater proportion of fixed costs to variable costs. As a result, the firm is affected by volume of sales each month (since it must attain sufficient sales volume to cover its substantial fixed costs) even though it earns a large profit on each incremental sale.

stich3 [128]3 years ago

5 0

Answer:

c. has a greater proportion of fixed costs to variable costs.

Explanation:

Operating leverage refers to the how or the means through which firms or organization can increase their operating income by increasing their revenue generation. As a way, more quantity of goods has to be sold to make up the cost.

In other words, operating leverage is a way of determining a business break even point.

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tigry1 [53]

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4 years ago

Why is doing timely reconciliations a key part of internal control activities? It ensures that

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Answer:

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3 years ago

Which of the following statement is incorrect about the mission? A. The mission statement provides boundaries and focus for org

34kurt

Answer: OPTION E

Explanation: Mission refers to the ultimate goal that a business organisation has. It is the end point towards which all the procedures and activities of the business is to be carried out.

It is the future determining factor of a business. In nowadays the business is operating at a very high level with different functional area. These areas have different activities to perform and are useful in different ways by the organisation.

Thus, every functional area could have its different mission to complete.

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3 years ago

Larry Nelson holds 1,000 shares of General Electric common stock. The annual shareholders meeting is being held soon, but as a m

Lisa [10]

Answer:

Larry must have signed a PROXY AGREEMENT that gives the management group control over his shares.

A proxy agreement is generally used for stockholders voting procedures, they basically grant another person the right to vote on behalf of another stockholder.

Larry's current investment in the company is $86,000.

= 2,000 stocks x $43 = $86,000

If the company issues new shares and Larry makes no additional purchase, Larry's investment will be worth $82,560.

company's new market value = (20,000 x $43) + (5,000 x $34.40) = $1,032,000

new stock price = $1,032,000 / 25,000 stocks = $41.28

= $41.28 x 2,000 = $82,560

This scenario is an example of STOCK DILUTION.

The stock price will lower because the increase in the company's value is less than proportional to the increase in the number of stocks.

Larry could be protected if the firm's corporate charter includes a PREEMPTIVE provision.

Preemptive rights give current stockholders the right to purchase more stocks (in case the company issues more stocks) before any outside investors.

If Larry exercises the provisions in the corporate charter to protect his stake, his investment value in the firm will become $103,200.

= [(5,000 / 10) x $34.40] + $86,000 = $17,200 + $86,000 = $103,200

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3 years ago

Susie Smith signed a note agreeing to pay "Annie Greene, Mary Hodge" $1,000. The payment was for painting her house. An issue wi

r-ruslan [8.4K]

Answer:

All the options are wrong, they seem to be from another question.

But the correct answer to this question is that Mary is wrong, Annie can legally endorse the note even if her last name was misspelled. Since the misspell was a minor error, only an extra letter (Green vs. Greene), she can do it without any problem because it's easy to prove she is the same person.

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3 years ago