A project has fixed costs of $1,600 per year, depreciation charges of $500 a year, annual revenue of $8,400, 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.)

Return to question 00 A project has fixed costs of $1,600 per year, depreciation charges of $500 a year, annual revenue of $8,400, 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? Answer is complete and correct. Increase in pretax profits 40 % b. What is the degree of operating leverage of this project? (Round your answer to 1 decimal place.) Answer is complete but not entirely correct. Degree of operating leverage 43 X times