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ATech has fixed costs of $12 million and profits of $6 million. Its competitor, ZTech, is roughly the same size and this year earned the

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ATech has fixed costs of $12 million and profits of $6 million. Its competitor, ZTech, is roughly the same size and this year earned the same profits, 56 million. But it operates with higher fixed costs of $14 million and lower variable costs. a. What is the degree of operating leverage (DOL) for each company (Defined here as 1+ Fixed costs/Profit) (Do not round Intermediate calculations. Round your answers to 2 decimal places.) Degree of operating leverage for ATech Degree of operating leverage for Tech OceanGate sells external hard drives for $350 each. Its total fixed costs are $60 million, and its variable costs per unit are $290. The corporate tax rate is 30%. If the economy is strong, the firm will sell 4 million drives, but if there is a recession, it will sell only half as many a. What will be the percentage decline in sales if the economy enters a recession? Percentage decline in sales b. What will be the percentage decline in profits if the economy enters a recession? Percentage decline in profit %

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