... Difficulty: Easy If a firm's accounting degree of operating leverage is 1 .12, then a 10 percent increase in revenue should result in a 12 percent increase in EBIT A) True B) False Ans: B Format: True/False... flow A) True B) False Ans: B Format: True/False Learning Objective: LO Level of Difficulty: Easy 12 Taxes not enter into the equation for the cash flow degree of operating leverage because both... of Difficulty: Medium 29 The process of identifying the bundle of projects that creates the greatest total value and allocates the available capital to these projects is called capital asset pricing