1. If a firm has a degree of operating leverage (DOL) that is greater than 1.0, then it means that a 1.0 percent change in _____ will cause a change in earnings before interest and taxes (EBIT) that is _____ 1.0 percent.?
a. ?earnings per share; greater than
b. ?fixed costs; less than
c. ?net income; greater than
d. ?sales; greater than
e. ?net operating income; less than
2. Which of the following accounts does not necessarily change when sales increase?”
a. Notes payable
b. Accrued taxes
c. Accounts receivable
d. Accounts payable
e. Accrued wages