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A proposed project has fixed costs of $84,000 per year. The operating cash flow at 7,500 units is $93,000. Ignoring the effects of taxes, if
A proposed project has fixed costs of $84,000 per year. The operating cash flow at 7,500 units is $93,000. Ignoring the effects of taxes, if the units sold rise from 7,500 to 8,000, what will be the increase in operating cash flow (New OCF) and what is the new degree of operating leverage (New DOL)?
A.New OCF: $93,200 New DOL = 1.7999 | |
B.New OCF: $105,013.33 New DOL = 1.7999 | |
C.New OCF: $93,200 New DOL: 1.9013 | |
D.New OCF: $105,013.33 New DOL = 1.9013 |
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