Which of the following statements about the degree of operating leverage (DOL) is correct?
A) The higher the DOL, the closer the firm is to its financial breakeven point.
B) The higher the DOL, the higher the firm's financial risk.
C) The lower the DOL, the higher the firm's operating risk.
D) The higher the DOL, the closer the firm is to its operating breakeven point.
E) The higher the DOL, the higher the percentage increase in the sales when fixed operating costs change.
Correct Answer:
Verified
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