None of these are correct.

Degree of financial leverage

Degree of operating leverage

Degree of combined leverage

Firm B has a lower break-even point than Firm A, but Firm A's profit grows faster after the breakeven.

Firm A has a higher break-even point than Firm B, but Firm A's profit grows slower after the breakeven.

Firm B has a lower break-even point than Firm A, and profit grows the same rate for both companies after the break-even point

Firm A has a lower break-even point than Firm B, but Firm A's profit grows faster after the breakeven.

more fixed than variable costs.

more variable than fixed costs.

all variable costs.

all fixed costs.

None of the options are true.

revenue and costs are a linear (constant) function of volume.

the cost of goods sold goes up as revenue increases.

sales prices and costs increase when the economy is strong and confidence is high.

the degree of combined leverage declines.

the break-even point rises.

the degree of financial leverage declines.

All of the options are true.

None of the options are true.

includes depreciation expense as a fixed cost when calculating the degree of financial leverage.

is helpful in analyzing the short-term outlook of the firm, particularly when it is in trouble financially.

is important when analyzing long-term profitability.

17,000 units

5,667 units

15,000 units

3,400 units

0.8125x

4.33x

1.25x

5.33x