A company with low operating leverage will experience a sharp increase in net income with a given increase in sales.

Name: A company with low operating leverage will experience a sharp increase in net income with a given increase in sales.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

A company with low operating leverage has a higher proportion of variable costs relative to fixed costs, meaning that net income will not increase as sharply with an increase in sales compared to a company with high operating leverage.

A Company with Low Operating Leverage Will Experience a Sharp