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A new product requires an initial investment of $10 million and will be depreciated to an expected salvage of zero over 10 years. The price

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A new product requires an initial investment of $10 million and will be depreciated to an expected salvage of zero over 10 years. The price of the new product is expected to be $40,000 and the variable cost per unit is $20,000. The fixed cost is $2 million. Suppose sales are 200 units. What is the degree of operating leverage (DOL)? a. 2.5 b. 2 c. 1 d. 1.5

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