Question
Company A and B are both projecting an increase in sales of 12 percent. Company A has an operating leverage of 2.4 while Company B
Company A and B are both projecting an increase in sales of 12 percent. Company A has an operating leverage of 2.4 while Company B has an operating leverage of 2.0. Which of the following statements is correct with respect to the expected change in operating net income?
Group of answer choices
Operating Income for Company A and B are both expected to increase by same percentage
Operating Income for Company B is expected to increase by 6 percent
Operating Income for Company B is expected to increase by a lower percentage than Company A
Operating Income for Company A expected to increase by 5 percent
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