Taxes do not enter into the equation for the degree of cash flow of operating leverage because both fixed costs and pretax operating cash flows are measured on a pretax basis.

Name: Taxes do not enter into the equation for the degree of cash flow of operating leverage because both fixed costs and pretax operating cash flows are measured on a pretax basis.
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Question

Quizplus · Accepted Answer

Taxes are not considered in the calculation of operating leverage because fixed costs and operating cash flows are measured on a pre-tax basis.

Taxes Do Not Enter into the Equation for the Degree