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A project has fixed costs of $1,400 per year, depreciation charges of $520 a year, annual revenue of $7,200, variable costs equal to two-thirds of
A project has fixed costs of $1,400 per year, depreciation charges of $520 a year, annual revenue of $7,200, variable costs equal to two-thirds of revenues and the tax rate is 20%.
A. If sales increase by 10%, what will be the increase in pretax profits?
B. What is the degree of operating leverage of this project? Note: Round your answer to 1 decimal place.
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