Which of the following is the correct interpretation of a degree of operating leverage of 5? Multiple Choice Operating leverage of 5 means that sales can decrease by 5% before the firm's current level of sales will hit the break-even point. Operating leverage of 5 means that if sales increase by 5% the firm will hit its break-even point. Operating leverage of 5 means that the company would need to increase sales by 5 times in order to hit its break-even point. Operating leverage of 5 means that if sales increase by 5%, there will be a 25% increase in the firm's pretax profit. Operating leverage of 5 measures the degree of debt employed by the firm's debt structure.

Transactions on april 1 of the current year, andrea byrd established a business to manage rental property. she completed the following transactions during april: opened a business bank account with a deposit of $45,000 from personal funds. purchased office supplies on account, $2,000. received cash from fees earned for managing rental property, $8,500. paid rent on office and equipment for the month, $5,000. paid creditors on account, $1,375. billed customers for fees earned for managing rental property, $11,250. paid automobile expenses for month, $840, and miscellaneous expenses, $900. paid office salaries, $3,600. determined that the cost of supplies on hand was $550; therefore, the cost of supplies used was $1,450. withdrew cash for personal use, $2,000. required: 1. indicate the effect of each transaction and the balances after each transaction: for those boxes in which no entry is required, leave the box blank. for those boxes in which you must enter subtractive or negative numbers use a minus sign. (example: -300)