A proposed project has fixed costs of $$37,000$ per year. The operating cash flow at

$13,000$ units is $$62,000.$

a$.$ Ignoring the effect of taxes, what is the degree of operating leverage?

DOL

b$.$ If units sold rise from $13,000$ to $13,300,$ what will be the increase in operating cash

flow?

OCF at $13,300$ units $10$

$3$

points

c$.$ What is the new degree of operating leverage?

New DOL