Both operating leverage and financial leverage involve the substitution of fixed costs for variable costs.

Name: Both operating leverage and financial leverage involve the substitution of fixed costs for variable costs.
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Question

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Both operating leverage and financial leverage involve increasing the percentage of fixed costs in relation to variable costs, which can lead to increased profitability in favorable market conditions but also increased risk in unfavorable market conditions.

Both Operating Leverage and Financial Leverage Involve the Substitution of Fixed