acc211 Unit 3 discussion latest 2017
Question # 00519074
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Updated on: 04/28/2017 08:53 AM Due on: 04/28/2017
Week 3 discussion
Companies often use leverage to augment profits. Based on what you learned this week, please explain the following in detail:
With regards to Operating Leverage, please explain why a company with HIGH Operating Leverage faces greater financial risk in a declining sales period compared to a company with LOW Operating Leverage. (HINT: The key here is the relation between fixed costs and variable costs.)
What does a business's Contribution Margin represent? What does the Contribution Margin have to do with Operating Leverage?
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Solution: acc211 Unit 3 discussion latest 2017