In the previous problem, what is the degree of operating leverage at the given level of output?

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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?

Data From Previous Problem:

Consider a four-year project with the following information: initial fixed asset investment = $490,000; straight-line depreciation to zero over the four-year life; zero salvage value; price = $32; variable costs = $19; fixed costs = $210,000; quantity sold = 110,000 units; tax rate = 34 percent. How sensitive is OCF to changes in quantity sold?

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Related Book For  book-img-for-question

Fundamentals of corporate finance

ISBN: 978-0073382395

9th edition

Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan

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