Which of the following statements is false?
A) The purchase of equipment to replace labor in a manufacturing process will increase a firms operating leverage.
B) The higher the proportion of fixed costs to variable costs in a project, the greater the sensitivity of EBIT to revenue changes.
C) Depreciation and amortization are considered fixed costs.
D) The lower the proportion of fixed costs to variable costs in a project, the more pre-tax operating cash flows will vary as revenue varies.
Correct Answer:
Verified
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