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S1] Operating leverage will decrease as the company's margin of safety increases. [S2]The break-even point for a capital intensive, automated company will tend to be higher than for a less capital intensive company while the m

S1] Operating leverage will decrease as the company's margin of safety increases. [S2]The break-even point for a capital intensive, automated company will tend to be higher than for a less capital intensive company while the m

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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[S1] Operating leverage will decrease as the company's margin of safety increases. [S2]The break-even point for a capital intensive, automated company will tend to be higher than for a less capital intensive company while the margin of safety will tend to be lower.

Only S1 is true.

Only S2 is true.

Both statements are true.

Both statements are false.

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