1. The Degree of Operating Leverage (DOL) is the _____.
A. Dependence of a firm on variable costs
B. Percentage of sales price that is needed to cover variable costs
C. Degree to which a firm relies on fixed costs
D. Percentage of a sales price which represents the contribution margin
2. If the internal rate of return (IRR) equals the required rate of return, the profitability index should be ______ 1.00.
A. above
B. below
C. equal to