Accounts does not necessarily change when sales increase

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1. If a firm has a degree of operating leverage (DOL) that is greater than 1.0, then it means that a 1.0 percent change in _____ will cause a change in earnings before interest and taxes (EBIT) that is _____ 1.0 percent.?

a. ?earnings per share; greater than

b. ?fixed costs; less than

c. ?net income; greater than

d. ?sales; greater than

e. ?net operating income; less than

2. Which of the following accounts does not necessarily change when sales increase?”

a. Notes payable

b. Accrued taxes

c. Accounts receivable

d. Accounts payable

e. Accrued wages

Reference no: EM131905373

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