Answer:
Total revenue will be equal to $201900
Explanation:
We have given net sales revenue = $187000
Interest revenue = $10200
Gain on sale equipment = $4700
We have to find the to total revenue
Total revenue is given by
Total revenue = net sales revenue + interest revenue + gain on sdale equipment = $187000+$10200+$4700 = $201900
So total revenue will be equal to $201900
Final answer:
Baer Food Co. should have reported total revenues of $201,900, which includes net sales revenue, interest revenue, and gain on sale of equipment, excluding income from discontinued operations and income tax.
Explanation:
In calculating the total revenues on Baer Food Co.\u2019s Year 3 single-step income statement, we must consider only the items that are typically classified as revenues. The list provided includes net sales revenue, interest revenue, and gain on sale of equipment. Items such as income from discontinued operations and income tax should not be included in the revenue total as they are not considered operating revenues. Therefore, the correct total revenue calculation would be:
Net sales revenue: $187,000Interest revenue: $10,200Gain on sale of equipment: $4,700Adding these figures together gives us:
$187,000 (Net sales revenue) + $10,200 (Interest revenue) + $4,700 (Gain on sale of equipment) = $201,900
Therefore, Baer Food Co. should have reported total revenues of $201,900 in the revenues section of the Year 3 income statement.
The use of simulation to create an aggregate plan:
a. will produce the best plan.
b. will produce a plan that may not be the best plan.
c. is the most widely used technique.
d. requires a minimum of four iterations to be accurate.
e. is easy to implement.
Answer:
Answer is option b i.e. will produce a plan that may not be the best plan.
Explanation:
Simulation is the technique used to create an artificial environment that is similar to the real-life situation to study various problems and how to tackle them. However, it is not the full proof plan which means it is based on certain probability and chances that a certain situation might arise. Many times situations are not as planned and here we cannot solely depend on the solution that we have learned during the simulation process. Therefore, the simulation will provide us with a plan that may or may not be the best plan.
Simulation in aggregate planning may not yield the best plan as it depends on assumptions and model parameters. While useful for predicting system dynamics, simulations are subject to limitations.
The use of simulation to create an aggregate plan will produce a plan that may not be the best plan. While simulation models are powerful tools that use computer algorithms to predict system dynamics and are particularly effective in visualizing and understanding complex systems, they are subject to the limitations of the assumptions and parameters set within them. Simulations can be cost-effectively used to model ecosystem dynamics and facilitate clinical decision-making, but they do not guarantee the best plan due to potential inaccuracies and oversimplifications. The effectiveness of simulation models depends significantly on the accuracy and completeness of the data and assumptions that inform them.
Cindy goes to the lumber yard to buy lumber for a deck that she is building. She tells the salesperson at the lumber yard that she is relying on him to select the right lumber for a project. She buys the lumber and builds the deck. The deck collapses because the lumber was not strong enough to support it. What type of warranty most likely has been breached?a. Express
b. Implied warranty of merchantability
c. Implied warranty of fitness for a particular purpose
d. None
Answer:
c. Implied warranty of fitness for a particular purpose
Explanation:
The warranty of fitness for a particular purpose is inferred whenever a purchaser depends on the supplier to pick the products to fit a particular query.
For instance, if a customer asks a mechanic to supply winter tires and receives tires that are unfit for use in weather, this warranty is breached.
It is also possible to explicitly revoke this implicit warranty by name, thus moving the threat of unfitness back to the purchaser.
Companies that engineer products to customer specifications normally do not have _______________ as part of their supply chains.
Answer:
The answer would be B
Explanation:
Companies that engineer products to customer specifications normally do not have distribution centers as part of their supply chains.
If a ppf has a negative slope and is bowed out, we experience ________ opportunity costs as we continue to move down and to the right along the curve.
Answer:
Explanation:
Production possibility frontier (ppf) is a graph which shows the existence of opportunity cost of moving from one combination of goods to another . Its slope is always negative and bowing out or downward sloping because opportunity costs always diminish or go down due to law of diminishing marginal return.
The organization's _____ is stated in a challenging manner to inspire employees, customers, and shareholders.a. goalsb. mission statementc. vision statementd. objective
Answer: Mission Statement
Explanation:
A company's mission statement is a short description of the basic aim the company wants to achieve, what the company holds as it's key values, and the geographical area around which it would love to achieve it's objectives.
The mission statement as stated in the question most times is written in a challenging manner to inspire the employees of the company, it's customers and other stakeholders to make positive impact in the society.
During the past year, Arnold Inc.'s comparative balance sheet reported an increase in overall stockholders' equity of $43,500, a decrease in total liabilities of $17,200, and an increase in assets other than cash of $12,000. Consequently, Arnold, Inc. reported a(n) __________ in cash of ____________.
Answer:
increase in cash of $14,300
Explanation:
The question is related to basic accounting equation:
Assets = Liabilities + Owner's EquitySince we have to find increase or decrease in cash, we will break up Assets into two parts that are Other Assets and Cash.
Now the equation would look like this:
Other Assets + Cash = Liabilities + Owner's Equity$12,000 + Cash = -$17,200 + $43,500Cash = - $17,200 + $43,500 - $12000Cash = $14,300Notable points: Increase in Other Assets is shown by +$12,000
Decrease in Liabilities is shown by -$17,200
Increase in Owner's Equity is shown by +$43,500
End result is +$14,200 showing increase in Cash
Stacy, a self-employed accountant, currently earns $100,000 annually. Stacy has been able to save 18% of her annual Schedule C net income. Assume that Stacy paid $11,000 in Social Security taxes, and that she plans to pay off her mortgage at retirement, thereby relieving her of her only debt. Stacy presently pays $1,500 per month toward the mortgage. Based on the information provided herein, what do you expect Stacy’s wage replacement ratio to be at retirement?
Answer:
Wage Replacement Ratio = $53,000 / $100,000 = 53%
Explanation:
Total Mortgages = $1,500 x 12 = $18,000
Dollar Value Percentage
Salary $100,000 100%
Less: Self-Employment Taxes (11,000) (11%)
Less: Savings (18,000) (18%)
Less: Mortgage Payments (18,000) (18%)
$ 53,000 53%
Wage Replacement Ratio = $53,000 / $100,000 = 53%
Final answer:
Stacy's wage replacement ratio at retirement is expected to be 36%.
Explanation:
To calculate Stacy's wage replacement ratio at retirement, we first need to determine her annual Schedule C net income. If she saves 18% of her annual income, then her annual savings would be:$100,000 × 0.18 = $18,000
Next, we can calculate Stacy's mortgage pay-off amount by multiplying her monthly payment by 12:$1,500 × 12 = $18,000
Considering that Stacy has no other debts and plans to pay off her mortgage at retirement, her wage replacement ratio would be:($18,000 + $18,000) / $100,000 = 0.36 or 36%
If 72 cupcakes must be divided equally among the students in a certain class, how many students are in the class?
(1) If the number of students is reduced by one-third, each student will receive 3 more cupcakes.
(2) If the number of cupcakes is doubled, each student will receive 12 cupcakes.
Answer:
Number of students will be 12
Explanation:
We have given total number of cupcakes = 72
Let total number of students = N
(A) Then cupcakes received by each individual [tex]=\frac{72}{N}[/tex]
Now according to question number of students are reduced by [tex]\frac{1}{3}[/tex], then cupcakes received by each individual students is reduced by 3
So new number of students [tex]=N-\frac{N}{3}=\frac{2N}{3}[/tex]
Now according to question [tex]\frac{72}{\frac{2N}{3}}=N-3[/tex]
[tex]=216=2N^2-6N[/tex]
[tex]2N^2-6N-216=0[/tex]
N = 12 and N = -9
As students can not be negative so N = 12
(B) Now according to second question
[tex]72\times 2=12N[/tex]
N = 12 students
In insurance, to determine acceptable risks is the primary responsibility of the:
Answer: Underwriter.
Explanation:
An underwriter is an organization/individual that accesses a risk, and then estimates the cost of the damages resulting from that risk and takes responsibility for the payment of damages, in the eventuality that the risk occurs: The amount paid by the underwriter for a risk, is repaid in the form regular commission by their client.
Therefore the underwriter is primarily the one responsible, for judging if a risk is acceptable to receive payment or not.
Underwriters in insurance companies are responsible for determining acceptable risks, setting premiums based on expected value of loss, claims, administrative costs, and ensuring profitability. They may categorize policyholders into risk groups to manage potential losses and to maintain actuarial fairness in the insurance market.
Explanation:Insurance Companies and Risk Assessment
In insurance, determining acceptable risks is the primary responsibility of underwriters within the insurance company. Underwriters assess various risk factors and decide whether to provide insurance to individuals or groups, and at what premium. Insurance companies aim to diversify risk across a large group of policyholders.
Premiums are generally set based on the expected value of the loss, plus an additional fee to ensure the insurance company's profitability. These premiums must cover policyholder claims, administrative costs, and allow for investment income earned on reserves, thus enabling the firm to generate profits. Insurers may organize individuals into risk groups, where each groupShares similar risks for certain adverse events based on factors like lifestyle, location, and personal habits.
Insurance markets rely on the ability of insurers to manage adverse selection, sometimes leading to situations where high-risk individuals are charged more or low-risk individuals are required to purchase insurance. Ultimately, the practice of categorizing risk groups must be balanced with actuarial fairness and considerations for government regulations in the insurance industry.
When there is excess demand in the loanable funds market, which of the following will occur?
When there is excess demand in the loanable funds market, interest rates typically rise. This happens due to lenders recognizing the opportunity to raise rates because of high demand. As interest rates rise, more people prefer to lend, reducing the gap between the supply and demand.
Explanation:
When there is excess demand in the loanable funds market, the borrowers are more than the lenders. This scenario often takes place when the interest rate is below the equilibrium. In such a situation, lenders or firms perceive that there is an opportunity to raise the interest rates due to high demand.
As an example, assume that the interest rate stands at 13%, the supply of the funds is $510 billion, while the demand stands at $700 billion. Here, there is an excess demand of $190 billion. As result, lenders can raise the interest rates to balance this supply and demand gap.
Remember, when the interest rate increases, it encourages more people to lend money, increasing the supply of loanable funds and simultaneously reducing the demand from borrowers who now find it expensive to borrow. As such, the market faces economic pressures causing the interest rate to creep up towards the equilibrium level.
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I recently saw an advertisement that said your company would give a 5% discount to anyone who enrolls in a payment plan. My monthly bill is $75. How much will i save if i enroll in the automatic payment plan
Answer:
3.75
Explanation:
we multiply 75 by 5%
5% can also be written as .05
When a person wants to save after enrolling in the automatic payment plan, the person can save up to 3.75.
What is the automatic payment plan?When funds are regularly transmitted on a certain date to pay a recurring expense, such as a mortgage, credit card, or utility bill, this is known as an automatic bill payment.
To pay their monthly expenses, people can set up automatic bill payments through their online bank account, brokerage, or mutual fund. With the handy option of "AutoPay," the person’s default credit card or bank account will be used to automatically pay the invoices each billing cycle on the due dates.
One won't have to worry about having to remember to pay on time and they will escape any late penalties.
Required calculations can be done by multiplying [tex]75[/tex] by [tex]5[/tex] ‰ or [tex]0.05[/tex],
[tex]75 \times 0.05 = 3.75[/tex]
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a period of time against which costs of the market basket in other periods will be compared in computing a price index is called
Answer:
Base period
Explanation:
The formula to compute the price index is shown below:
Price index = (Market price in a given year) ÷ (Price at the base period) × 100
Based on the market cost for the given period for computing the price index, the base period price is also needed without which the computation cannot be done. The formula is shown above.
The base period is generally used for comparison so that proper analyzes could be made
It is standard procedure to reject a job offer during the interview so you do not waste the time of the interviewer.
A. True
B. False
Answer: False.
Explanation:
An interview is a meeting between an interviewer(s) and a job applicant, where the job applicant is asked questions on his capability to handle a particular job role.
If a job applicant is not interested in a job offer, he doesn't need to attend the interview even after invitation, the job applicant's absence in the interview would show lack of interest in the job offer.
Answer:
false
Explanation:
To keep enough cash on hand to meet depositors' demand for withdrawals, banks must engage in liquidity management.
A. True
B. False
On July 1, 2018, an interest payment date, $150,000 of Parks Co. bonds were converted into 3,000 shares of Parks Co. common stock each having a par value of $45 and a market value of $54. There is $6,000 unamortized discount on the bonds. Using the book value method, Parks would record:
Answer:
bonds payable 150,000 debit
discount on BP 6,000 credit
common stock 135,000 credit
additional paid-in 9,000 credit
--to record conversion of bonds into share--
Explanation:
We compare the carrying value of the bonds with the book value of the shares:
150,000 bonds converted into 3,000 shares
value of the bonds: 150,000 - 6,000 discount = 144,000
BOOK value of the common 3,000 x 45 = 135,000
additional paid-in 9,000
The second largest share of an individual’s consumption expenditure is for nondurable goods (such as food and clothing) at approximately _____ percent.
a. 9
b. 29
c. 59
d. 89
Answer:
b. 29
Explanation:
consumption expenditure is the expenditure directly incurred by the households for the purchase of goods and services.
approximately 29% which is the second largest share of an individual’s consumption expenditure is for nondurable goods.
The people in an economy have $25 million in money. There is only one bank where they deposit their money and it holds 10% of the deposits as reserves. What is the money multiplier in this economy?
A. 5 B. 1 C. 20 D. 10
Answer:
The people in an economy have $25 million in money. There is only one bank where they deposit their money and it holds 10% of the deposits as reserves. What is the money multiplier in this economy?
D. 10
Explanation:
10% of $25, 000, 000= $2,500,000
Money multiplier in this economy is by 10
The money multiplier in this economy is 10. This is computed by taking the reciprocal of the bank's reserve requirement, in this case, 10%.
Explanation:In economics, the money multiplier is the amount of money that banks generate with each dollar of reserves. The money multiplier is calculated as the reciprocal of the reserve requirement. In this case, the bank holds 10% of deposits as reserves. Therefore, we compute the money multiplier as 1 / 0.10 = 10. This means that for every dollar deposited in the bank, the bank can loan out 10 times that amount. Therefore, the money multiplier in this economy is 10 (Option D).
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The ratios used in evaluating a company's liquidity and short-term debt paying ability that complement each other are the Entry field with incorrect answer now contains modified data Accounts receivable turnover ratio and the Entry field with correct answer current ratio.
Answer:
Current Ratio
Explanation:
Current ratio is the proportion of current assets to current liabilities. It is one of the liquidity ratios that measures the capability of an organization to meet it short term obligations which is represented by current liabilities such as accounts payable and short term loans.
These liabilities are met with current assets such as cash and accounts receivables. Ideal current ratio is 2:1 that implies that the organization has enough currents assets to meet its short term liabilities as well as maintain adequate liquidity.
______________ typically aim to build commercial mortgage loan portfolios that are diversified by property type and geography as well as in accordance with applicable investment guidelines.
A) Pension Funds
B) Commercial Banks
C) REITs
D) Life Insurance Companies
Answer:
D, Life Insurance companies
Explanation:
Life insurance is a contract between an insurance policy holder and an insurer such that the insurance policy holder promises to pay the insurer a particular amount of money upon the death of the insurer's person of chioce after a period of time.
There are 3 types of life insurance namely; whole life, universal life and variable universal life insurances.
Life insurance companies provide life insurance services or policies at a certain rate every month.
Cheers
When gross domestic product (GDP) increases, national income ________ and national output ________.
Answer:
Increase , Increase
Explanation:
Gross domestic product GDP is a measure of the total value of a country's output in a given year. It shows the final value of all goods and services produced within the boundaries of an economy. Economists use GDP to ascertain whether an economy is expanding or declining.
An increase in GDP means that the total output in the economy. More products and services were produced in that period compared to the previous period. An increase in GDP creates employment as more workers will be needed in production processes. As demand and the number of workers increase, total income in the economy rises.
When GDP increases, national income and national output both generally increase. The relationship between GDP growth and population growth affects GDP per capita. Increases in real GDP result in higher incomes and increased demand for money throughout the economy.
When gross domestic product (GDP) increases, national income also increases and national output rises. GDP is a measure of the economic performance of a country, tallying the value of its goods and services produced over a specific period. An increase in GDP typically signifies that the economy is producing more goods and services, which often leads to higher incomes for individuals and businesses. This is because an increase in real GDP results in higher earnings throughout the economy, leading to a higher demand for money. It's important to note that these increases are assuming that the GDP growth outpaces the population growth. However, if the population grows faster than GDP, then while the overall GDP may still increase, the GDP per capita, or GDP for each individual, may decrease.
What are the opportunity costs of going to the gym for a workout rather than studying for an economics test?
Answer:
see below
Explanation:
Opportunity cost is the value of the forfeited benefits as a result of making a decision in a certain way. Decision making involves choosing one item over others. The cost or value of the option not chosen is the opportunity cost. The value of the forfeited option is the opportunity cost.
In choosing to go to the gym, the forgone activity is studying for the economic exam. The benefits associated with studying for the economic test is the opportunity cost. The value attached to the economic test, such as good grades, passing the test, or any reward arising from studying for the test, is the forfeited benefit and hence the opportunity cost.
An unlicensed person engages in advertising that conveys the clear impression that he is a licensed real estate broker or is an officer or employee of a corporation who knowingly advertises a false statement concerning any land or subdivision. In this scenario, which of the following is not true?
A. The advertiser is subject to a fine.
B. The advertiser can be sentenced to up to a year in prison.
C. The person is breaking the law.
D. The advertiser must prove he was grandfathered in as a licensee.
Answer: D. The advertiser must prove he was grandfathered in as a licensee.
Explanation:
The person has engaged in a false statement and is also an unlicensed person. The question states which of the following is not true. Which means that the advertiser must prove he was grandfathered in as a license is untrue. All the other option is true. Grandfathered in means that the individual is still functioning in an old rule rather than the new one.
You are meeting with the new CEO of your company to discuss marketing channel strategies. You are delighted to learn that the CEO actually understands the importance of marketing channels in a firm's sales success. The CEO tells you that his primary concern is that the chosen marketing channel facilitates the firm's ability to make products available when customers want them, and in locations where they want them. He leaves it to you to decide on the appropriate marketing channel. Given his primary concern you should make sure the channel you choose is capable of creating lots of _______________.
Answer:
You should make sure the channel you choose is capable of creating lots of:
Time and place utilities.
Explanation:
Utility:
In business, utility is defined as the benefit or value that a customer gets from the product of a business.
There are fours type of utilities which are: Time Utility, Form Utility, Place Utility and Possession Utility.Time Utility: This utility means that your product remain available to the customer at a time when the customer need it. Like if a customer wants the product available at night then it should be available.Place Utility: This utility means that the your product is available to the customer wherever the product is required. For example if a customer wants your product at a specific place then it should be available.In this questions, time and place utility were required from the manager.An MNC in a developing country is operating amidst severe space constraints, and the infrastructural conditions in the city are bad, causing a lot of lost man-hours. Anticipating rapid growth in the months to come, the company has created a recruitment plan based on its revenue expectations. However, it wants to manage this expansion without undertaking an expensive physical expansion. Which of the following could be a solution for the company?A) profit sharing
B) groupshifting
C) telecommuting
D) gainsharing
E) codetermining
Answer: Option C
Explanation: In simple words, telecommuting refers to the arrangement in which an employee of the organisation performer his or her job activities right from his or her home without going to a specified work place.
This is a modern times business technique which is used by organisations to save their costs like rent and travelling allowance to employees that they have to bear. Such arrangement is generally made for the jobs that requires no client dealings and have specified targets set.
Thus, from the above we can conclude that the company should go for telecommuting as it will save the man hours.
the advantages of using a licensing strategy to participate in foreign markets include.
Answer:
The advantages of using license strategy are given below.
Well suited to acheive scale of economies.Its helps in charging lower price than rivals.Helps to achieve first-mover advantages quickly and easily.Less risky strategy as you do not need to invest heavily in capital in the form of machinery, land , building and e.t.cEasy do terminate operations as dis-investment is easy in this case.
Licensing strategy offers advantages such as high ROI, technological advancements through specialization, simplified development, and less government involvement.
Explanation:The advantages of using a licensing strategy to participate in foreign markets include:
Potential High ROI (Return on Investment): Licensing allows companies to earn royalties and licensing fees from their intellectual property without having to invest significant resources in manufacturing or marketing.
Increased specialization leading to technological advantages: When a company licenses its technology or expertise to a foreign partner, it can benefit from their specialized knowledge and resources, which can lead to technological advancements.
Simplified development strategy: Instead of setting up new operations in foreign markets, licensing allows companies to rapidly enter new markets and start generating revenue.
Less government involvement: Licensing can help companies avoid navigating complex government regulations and restrictions that may be present in foreign markets.
The informational, political, and cultural disadvantages that foreign firms face when trying to compete against local firms in the host country market are referred to as ________.
a. opportunity costs
b. liability of foreignness
c. internalization disadvantages
d. the burden of internationalization
Answer:
B) Liability of foreignness
Explanation:
Liability of foreignness refers to the extra costs that a firm might incurr when operating in a foreign country.
This can results from a lack of knowledge of the host country's laws, regulations, culture, customs, etc.
For example, if an American company starts operations in for example, France, it will have to hire legal advisors, because the French legal system not only is different from Common Law in principle, but also because it is very complicated, with thousands of regulations. This represents a loss of competitiveness, and a handicap when competing against French companies.
Roberto Martinez is a marketing manager for Friendly Financial Services. He has been looking at a variety of factors, such as technological, socio-cultural and economic trends as well as competitive conditions. Martinez is confident that these factors will impact Friendly's future marketing success. His efforts are an example of:
Answer:
Environmental Scanning
Explanation:
Environmental scanning is the method of collecting information about activities within the internal and external environments of an entity and their relations.
As Roberto is looking at different factors in the company like, technological, socio-cultural and economic trends as well as competitive conditions, to groom the future of the company
The fundamental purpose of environmental scanning is to assist management in evaluating the organization's future direction.
If a premium on a bonds payable transaction is not amortized, what are the effects on interest expense and total stockholders' equity?
Answer and Explanation:
A bond premium which is payable on bond is amortized will be amortized with a charge to the premium and an a good representative for intrigue cost, lessening it. On the off chance that amortization isn't recorded, intrigue cost isn't appropriately decreased and is exaggerated. The exaggeration of intrigue cost will bring modest representation of the truth of net gain and a modest representation of the truth of value
Not amortizing a premium on bonds payable leads to a higher reported interest expense and artificially inflates total stockholders' equity, as the premium decreases the cost of borrowing over the bond's term but, if not amortized, remains as an overvalued asset.
If a premium on a bonds payable transaction is not amortized, the effects on interest expense and total stockholders' equity are specific and noteworthy. Normally, the premium on bonds payable, which is the amount by which the bond's issuance price exceeds its face value, should be amortized over the life of the bond. This amortization can reduce the amount of interest expense reported in each period. However, if the premium is not amortized, the interest expense will be reported as higher than it actually is because the premium serves to effectively reduce the cost of borrowing over the bond's term. Additionally, not amortizing the premium will lead to reporting a higher total stockholders' equity than accurate, as the unamortized premium is counted as an asset.
If the current price of a product is above the market equilibrium price, there is ________ of this product.
When the price of a product is above the market equilibrium price, there is a surplus of that product. This is because the supply of the product exceeds its demand.
Explanation:In the context of supply and demand, if the current price of a product is above the market equilibrium price, there is a surplus of this product. Market equilibrium is the price at which the quantity supplied equals the quantity demanded. If the price is set above this equilibrium point, the quantity supplied would exceed the quantity demanded causing a surplus. For example, if a shirt is priced at $20 and this is the equilibrium price, but the seller decides to increase the price to $25, fewer people will buy the shirts leading to a surplus supply of shirts remaining unsold.
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If the current product price is higher than market equilibrium, there is a surplus; this means producers are producing more than consumers want. It results in a producer surplus, where producers gain extra benefit by selling at a price above the base price they were willing to accept.
Explanation:If the current price of a product is above the market equilibrium price, there is a surplus of this product. In economic terms, a market is in equilibrium when the quantity supplied is equal to the quantity demanded. However, if the product is priced above the equilibrium price, then suppliers produce and are willing to sell more of the product than consumers are willing to buy, leading to an excess supply or surplus. This scenario results in producers realizing a producer surplus, which is the additional benefit gained by producers when the market price is greater than their base price. An example of this is when at a price of $45, firms are willing to supply 14 million units of a product but are able to charge a higher price of $80, thus gaining an extra benefit.
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Which of the following statements is not true? Select one:
a. Operating leverage refers to the extent to which a company's net income reacts to a given change in sales.
b. Companies that have higher fixed costs relative to variable costs have higher operating leverage.
c. When a company's sales revenue is increasing, high operating leverage is good because it means that profits will increase rapidly.
d. When a company's sales revenue is decreasing, high operating leverage is good because it means that profits will decrease at a slower pace than revenues decrease.
Answer:
D) When a company's sales revenue is decreasing, high operating leverage is good because it means that profits will decrease at a slower pace than revenues decrease.
Explanation:
High operating leverage means that a business will have a higher proportion of fixed costs as compared to variable expenses. And as such, a decrease in sales would mean a more rapid fall in profits as a larger proportion of the costs is made up of fixed costs and hence is unavoidable with a fall in sales. With this information in view high operating leverage and decreased sale will greatly reduce profits.
All the other statements (a,b and c) about operating leverage are true.
Hope that helps.