A term used to describe the effect of $1 in cost savings increasing pretax profits by $1 and a $1 increase in sales increasing pretax profits only by $1 multiplied by the pretax profit margin.

Profit leverage effect

Explanation:

The profit leverage effect explains why a 1% decrease in costs increases pretax profit more than a 1% increase in sales revenue.

An increase in sales revenue is always associated with an increase in costs, so the net change in pretax profit is = additional sales revenue - additional costs.

While a decrease in costs will increase pretax profit in the same proportion.

i believe that it is a 45% chance.

hi,

henry is an economist and wants to understand the relationship between inflation and consumer spending habits. for his research, he needs the consumer price index for 2014 and the inflation rate. based on the prices of goods given, what will he find to be the cpi and inflation rate for 2014? assume that a consumer’s basket for three consecutive years consists of the following:

you dont privide answer choices.

answer - 15% of a inflatation rate is 15% less in cpi