Operating Leverage In the previous problem, what is the degree of operating leverage at the given level

Question:

Operating Leverage In the previous problem, what is the degree of operating leverage at the given level of output? What is the degree of operating leverage at the accounting break-even level of output?

Consider a four-year project with the following information: initial fixed asset investment = $460,000; straight-line depreciation to zero over the four-year life; zero salvage value; price = $26; variable costs = $18; fixed costs = $190,000; quantity sold = 110,000 units; tax rate = 34 percent. How sensitive is OCF to changes in quantity sold?

Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...