If a firm does not meet its forecasted sales level, then leverage will result in a magnified loss in income compared to what is expected because:
A) retained earnings will increase rapidly.
B) inventories will be built very slowly.
C) production facilities will be expanded greatly.
D) additional external funds needed will be reduced.
E) sales operations will be reduced drastically.

Question

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The Answer of If a firm does not meet its forecasted sales level, then leverage will result in a magnified loss in income compared to what is expected because:
A) retained earnings will increase rapidly.
B) inventories will be built very slowly.
C) production facilities will be expanded greatly.
D) additional external funds needed will be reduced.
E) sales operations will be reduced drastically.

If a Firm Does Not Meet Its Forecasted Sales Level