Operating leverage refers to
A) the additional chance of insolvency borne by the common shareholder.
B) financing a portion of the firm's assets with securities bearing a fixed rate of return.
C) a high degree of variable costs of production.
D) the incurrence of fixed operating costs in the firm's income stream.
D
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Auto Shop, Inc., incurred the following costs in acquiring plant assets:
a. Purchased land with a $100,000 down payment and signed a $75,000 note payable for the balance. b. Delinquent property tax of $2,500 and legal fees of $1,000 had to be paid before the land could be purchased. c. $12,000 was paid to demolish an unwanted building on the land. d. Architect fee of $7,000 was paid for the design of a new office building. e. An office building was constructed at a cost of $500,000. A long-term note payable was used to pay for the cost. f. $17,500 was paid for fencing around the new building. $55,000 was paid for paving the parking lot by the new building. g. $20,000 was paid for lights in the new parking lot. h. $10,000 was paid for a sprinkler system for the bushes and grass. Required: Prepare journal entries for the above transactions. Explanations are not required.
Indicate the correct form of the adjective or adverb in parentheses. Use more or most, when appropriate, instead of less or least. Of all the guests, Julie and Bob stayed the (late)