The operating leverage factor will be exactly "1" only if a company has no fixed costs.

Name: The operating leverage factor will be exactly "1" only if a company has no fixed costs.
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Question

Quizplus · Accepted Answer

The operating leverage factor is the ratio of fixed costs to total costs. If a company has no fixed costs, then the ratio will be zero, resulting in an operating leverage factor of 1. Therefore, the statement is true.

The Operating Leverage Factor Will Be Exactly "1" Only If