How can we compute operating leverage
How can we compute operating leverage?
Expert
Operating leverage is highest in companies that got fixed operating cost for variable operating cost. It tells investor about the company’s situation and the risk profile of the company. It is evaluated when a company has fixed costs that are apart from the sales volume. When company has fixed cost then the percentage change in profits due to changes in sales volume is larger than the percentage change in sales. The calculation of this is named as degree of operating leverage (or DOL) that gives the extent to that operating profits change as sales volume changes. DOL (or Degree of operating leverage) = percentage change in income / percentage change in sale.
Why an economic problem does arise? Answer: It arises due to following reasons: A) Shortage of resources. B) Alternative utilizations of resources. C) Limitless wants and limited resources.
Explain of the law of demand?
Economic scarcity is pervasive, that makes choices essential. Therefore, rationally optimal decisions hinge upon tradeoffs which essentially reflect: (i) cooperation to minimize human greed. (ii) opportunity costs. (iii) competitive social behavior. (
Definition of “Full Employment”?
Why does a demand curve slope downward?
Entrepreneurs: (w) undertake risky forms of production to gain uncertain profits. (x) obtain interest payments for their services. (y) are usually overcompensated for their innovations. (z) receive virtually all their wealth by inheritance.
What divergences arise between equilibrium and an efficient output when spillover costs? How might government correct this divergence?
Explain the Trade pattern of U.S. and World Trade?
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?
Relative to most of the other countries, the United States encompasses historically relied more greatly on: (1) Public resource ownership and private income distribution. (2) Decentralized decision making and private resource ownership. (3) Exports of textiles, automo
18,76,764
1943640 Asked
3,689
Active Tutors
1456164
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!