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ATC Company has projected sales of 25,600 units with a selling price of $4.95 each. Annual fixed costs are $31,000 with variable costs of $2.18
ATC Company has projected sales of 25,600 units with a selling price of $4.95 each. Annual fixed costs are $31,000 with variable costs of $2.18 per unit. The project has a three-year life and requires an initial investment of $62,900 for equipment. The equipment will be depreciated straight-line to zero over three years. The tax rate is 34%. What is the projects degree of operating leverage at the given level of output?
A) 1.59
B) 1.68
C) 1.93
D) 2.04
E) 2.26
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