Question
Dorothy has the following projected cash flows: Income $65,000 fixed operating costs (excluding interest) $44,000 variable outlays $7,000 interest cost $5,000 repayment of debt $6,000
Dorothy has the following projected cash flows:
| Income | $65,000 |
| fixed operating costs (excluding interest) | $44,000 |
| variable outlays | $7,000 |
| interest cost | $5,000 |
| repayment of debt | $6,000 |
Does Dorothy have high operating leverage? Calculate what a 15 percent higher and 15 percent lower income outcome would do to profitability.
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Fundamentals Of Futures And Options Markets
Authors: John C. Hull
7th Edition
0136103227, 9780136103226
