The degree of pretax cash flow operating leverage will change for different levels of revenue.

Question

Quizplus · Accepted Answer

The degree of pretax cash flow operating leverage is a measure of how much operating cash flow changes with a change in revenue. As revenue increases, fixed costs remain constant, and operating leverage increases, which means the degree of pretax cash flow operating leverage will change for different levels of revenue. Therefore, option A is correct.

The Degree of Pretax Cash Flow Operating Leverage Will Change