21. Operating Leverage. What is the lowest possible value for the degree of operating leverage for a

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21. Operating Leverage. What is the lowest possible value for the degree of operating leverage for a profitable firm? Show with a numerical example that if Modern Artifacts (see Practice Problem 15a) has zero fixed costs, then DOL = 1 and in fact sales and profits are directly proportional, so that a 1% change in sales results in a 1% change in profits. (LO3)

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Fundamentals Of Corporate Finance

ISBN: 9780073382302

6th Edition

Authors: Richard A Brealey, Stewart C Myers, Alan J Marcus

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