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1. When a company substitutes fixed costs for some or all of its variable costs...

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Finance

1. When a company substitutes fixed costs for some or all of its variable costs to be more cost-effective, this is called:

A) financial leverage.

B) operating leverage.

C) investing in variable-rate bonds.

2. Which of the following is an example of operating leverage?

A) Paying applicant travel expenses for candidates to come to the head office for job interviews.

B) Investing in a bus to take employees to meetings in other offices instead of paying taxi and car service fees.

C) Reimbursing employees who go to outside seminars.

3. Which of the following is an example of operating leverage?

A) Buying food as needed for on-boarding receptions.

B) Hiring a full-time recruiter at a salary instead of paying overtime to the other recruiters already on staff.

C) Paying a fee per person for fingerprinting job candidates as part of their pre-employment processing.

4. Which of the following is a variable cost for HR?

A) Monthly rent on HR's office space

B) Annual fire insurance premium on the office.

C) Overtime expenses each pay period depend on how many hours employees work

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