Question
A proposed project has fixed costs of $36,000 per year. The operating cash flow at 12,000 units is $70,000. a. Ignoring the effect of taxes,
| A proposed project has fixed costs of $36,000 per year. The operating cash flow at 12,000 units is $70,000. |
| a. Ignoring the effect of taxes, what is the degree of operating leverage? |
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| b. If units sold rise from 12,000 to 12,400, what will be the increase in operating cash flow? |
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| c. What is the new degree of operating leverage? |
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Introduction To Corporate Finance
Authors: William L. Megginson, M.D. Lucey Brian C., Scott J. Smart, Scott B. Smart, Bill Megginson
1st Edition
184480562X, 9781844805624
