The degree of operating leverage

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Reference no: EM131615873

1. The Degree of Operating Leverage (DOL) is the _____.

A. Dependence of a firm on variable costs

B. Percentage of sales price that is needed to cover variable costs

C. Degree to which a firm relies on fixed costs

D. Percentage of a sales price which represents the contribution margin

2. If the internal rate of return (IRR) equals the required rate of return, the profitability index should be ______ 1.00.

A. above

B. below

C. equal to

Reference no: EM131615873

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