--%>
Assignment Help - homework help

Introduction of the term Operating Leverage

Give a brief introduction of the term Operating Leverage?

E

Expert

Verified

It is a leverage that refers to the improvement of profits since there is a fixed operating cost that is involved with each component. When the sales raises fixed cost does not raise and it results in higher profits. Higher fixed expenditures results in higher operating leverages that leads to higher business risks.

   Related Questions in Business Economics

  • Q : Facts serve to sort out good and bad

    Explain the statement: “Facts serve to sort out good and bad hypotheses.”?

    		•
  • Q : Who define Theory of Moral Sentiments

    The argument which slicing off one’s pinkie would be extra bothersome to which person than the loss of millions of his brethren was made within A Theory of Moral Sentiments (1755) through: (1) Adam Smith. (2) David Ricardo. (3) Theophrastus Phil

    		•
  • Q : Problem on Infrastructure The state

    The state legislature has voted to develop a grant-in-aid policy to try and induce local communities to devote more resources to improving their infrastructure. Town O = Has an operating budget of $2 million; currently spends a tot

    		•
  • Q : Describe the Euro Describe the Euro?

    Describe the Euro?

    		•
  • Q : Explain and give an illustration

    Explain and give an illustration of (a) the fallacy of composition; and (b) the “after this, therefore because of this” fallacy.  Why are cause-and-effect relationships difficult to isolate in the social sciences?

    		•
  • Q : Independent queue vs. pooled queue

    Instruction: McDonald's vs. Burger King - these two fast food chains use different waiting line design: Independent queue vs. pooled queue. To compare the two different queue systems on equal footing, let's assume that we pick a McDonald's sto

    		•
  • Q : Technical change and vintage technology

    In heterodox economics, what implications does technical change and vintage technology contain for the cost structure of the business enterprise?

    		•
  • Q : Problem on Legislature budget XY School

    XY School District has a large number of students in need of remedial instruction. The superintendent of XY School System can allocated her budget between purchasing X units of remedial instruction at a price of $2,000/unit and spending an amount ($Y) on all other sch

    		•
  • Q : Determine relative price when two

    When the prices for doughnuts and croissants are $.50 and $1 correspondingly: (w) the opportunity cost for one doughnut is two croissants. (x) this is better to buy two doughnuts than one croissant. (y) one croissant will make Pierre twice as happy as one doughnut. (z

    		•
  • Q : Increase in the American dollar price

    “An increase in the American dollar price of the South Korean won implies that the South Korean won has depreciated in value.”  Explain.

    		•