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Atech has fixed costs of $10.0 million and profits of $5 million. Its competitor, ZTech, is roughly the same size and this year eamed the
Atech has fixed costs of $10.0 million and profits of $5 million. Its competitor, ZTech, is roughly the same size and this year eamed the same profits, $5 million. However, ZTech operates with fixed costs of only $0.25 million but higher varlable costs. a. Calculate the operating leverage for each firm. (Round your answers to 2 decimal places.) b. Which firm will likely have higher profits If the economy strengthens? ATech ZTech
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