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A project has a fixed costs of $1,300 per year, depreciation charges of $500 per year, annual revenue of $6,900, variable costs equal to two-thirds
A project has a fixed costs of $1,300 per year, depreciation charges of $500 per year, annual revenue of $6,900, variable costs equal to two-thirds of revenues and the tax rate is 20%.
a) if sales increase by 10%, what will be an increase in pretax profits?
b)what is the degree of operating leverage of this project?
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