38．All else equal, the operating leverage of a firm is most likely to increase if there is:

Select exactly 1 answers from the following:
A. a decrease in the fixed costs.
B. an increase in the fixed costs.
C. a decrease in the fixed costs with a proportional decrease in variable costs.
D. an increase in the fixed costs with a proportional increase in variable costs.
答案和详解如下！
Feedback: Correct answer: B

Fundamentals of Financial Management, 8th edition, Eugene F. Brigham and Joel F. Houston (Dryden, 1998) pp 496-498

2006 Modular Level I, Vol. III, pp. 147-150

Study Session 11-50-b

explain business risk, discuss factors that influence business risk, calculate and interpret the effects of changes in sales or earnings before interest and taxes (EBIT) on earnings per share for companies with differing amounts of debt financing, define operating leverage, calculate and interpret degree of operating leverage, and explain how it affects a project抯 or company抯 expected rate of return

A higher fixed cost will increase fixed cost as a percentage of total cost. Operating leverage is the amount of fixed costs relative to total cost.

lost again

I am just starting to learn. i don't know the answer