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A project has fixed costs of $1,500 per year, depreciation charges of $500 a year, annual revenue of $9,000, variable costs equal to two-thirds of

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A project has fixed costs of $1,500 per year, depreciation charges of $500 a year, annual revenue of $9,000, 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? (Round your answer to 1 decimal place.)

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