Atech has fixed costs of $2.9 million and profits of $1 million. Its competitor, ZTech, is roughly the same size and this year earned the same profits, $1 million. However, ZTech operates with fixed costs of $2.47 million and lower variable costs. a. Calculate the operating leverage for each firm. (Round your answers to 2 decimal places.)
DOL ATech
DOL ZTech
b. Which firm will likely have higher profits if the economy strengthens?
ATech
ZTech

cognitive overload: having a lot on your mind impairs decision-making and tends to result in the simplest, but not necessarily best, option being selected.

empathy gaps: overlooking how you might feel in a different situation can result in unnecessary purchases, such as overbuying when shopping for food on an empty stomach.

optimism and overconfidence: wearing rose-tinted glasses and having unrealistic expectations about the future can affect money management and leave you unprepared for a change in circumstance.

instant gratification: seeking instant gratification drives impulsive spending and can undermine long-term planning and savings.

harmful habits: automatic or mindless behaviour can amplify a poor financial decision as it becomes a recurring event.

social norms: we are heavily influenced by the actions of others; while this can be in certain circumstances, it also contributes to the pressure to keep up with the joneses through conspicuous consumption.

wheres the chart? so i can answer.

the third answer is correct.

consumer credit. an advantage is that it allows consumers to afford expensive goods and services now, increasing their standard of living. however, a disadvantage is that it creates a trap for debt, if people do not have self control, they may see themselves filing personal bankruptcy.