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Consider a four-year project with the following information: initial fixed asset investment =$635,000; straight-line depreciation to zero over the four-year life; zero salvage value; price
Consider a four-year project with the following information: initial fixed asset investment =$635,000; straight-line depreciation to zero over the four-year life; zero salvage value; price =$53; variable costs =$44; fixed costs =$310,000; quantity sold =127,000 units; tax rate =25 percent. a. What is the degree of operating leverage at the given level of output? (Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 32.1616.) b. What is the degree of operating leverage at the accounting break-even level of output? (Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 32.1616.)
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