At an output level of 10,000 units, you have calculated that the degree of operating leverage is
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At an output level of 10,000 units, you have calculated that the degree of operating leverage is 2.35. The operating cash flow is $43,000 in this case. Ignoring the effect of taxes, what are fixed costs? What will the operating cash flow be if output rises to 11,000 units? If output falls to 9,000 units?
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To determine the fixed costs we can use the degree of operating leverage DOL formula DOL Operating c...View the full answer
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Related Book For 
Fundamentals of corporate finance
ISBN: 978-0073382395
9th edition
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan
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