A European company is planning an expansion through acquisition which has been shown to have a positive NPV. The relevant part of the companys existing income statement is as follows:

Revenues 480 million

Wage Costs 84 million

Material Costs 105 million

Variable Overheads 46.2 million

Fixed overheads 52.5 million

EBIT 132.3 million

The planned expansion is expected to increase revenues by 5% but wages, material costs and variable overheads are all expected to increase by 8%. Fixed costs will remain the same.

What is the company's Degree of Operating Gearing (DOG) before the planned expansion either 1.45 1.27 1.16 1.08 1.04 1.010 .980 .75 What is the company's Degree of Operating Gearing (DOG) after the planned expansion either 1.45 1.27 1.16 1.08 1.04 1.010 .980 .75 Has the companys exposure to systematic business risk increased, decreased or remained the same as a result of the planned expansion Blank 3 Increased Decreased Remained the same