Key Determinant of Operating Leverage | CFA® Level 1 Exam | Test Prep

Operating Leverage Determinant

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Question

Which of the following is a key determinant of operating leverage?

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Explanations

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A. B. C. D. E.

B

If a high percentage of a firm's total costs are fixed, the firm has high operating leverage. Higher fixed costs are generally associated with more highly automated, capital-intensive firms and industries.