If we consider the effect of taxes, then the degree of operating leverage can be written as:

Consider a project to supply Detroit with $27,000$ tons of machine screws annually for automobile production. You will need an initial $$4,700,000$ investment in threading equipment to get the project started; the project will last for $5$ years. The accounting department estimates that annual fixed costs will be $$1,125,000$ and that variable costs should be $$210$ per ton; accounting will depreciate the initial fixed asset investment straight$-$line to zero over the $5-$year project life. It also estimates a salvage value of $$500,000$ after dismantling costs. The marketing department estimates that the automakers will let the contract at a selling price of $$314$ per ton. The engineering department estimates you will need an initial net working capital investment of $$450,000.$ You require a return of $13$ percent and face a tax rate of $24.$

a$.$ What is the percentage change in OCF if the units sold changes to $28,000?($Do not round intermediate calculations and enter your answer as a percent rounded to $4$ decimal places, e$.$g$.,32\mathrm{.}1616.)$

b$.$ What is the DOL at the base$-$case level of output? $($Do not round intermediate calculations and round your answer to $4$ decimal places, e$.$g$.,32\mathrm{.}1616.)$

$\backslash$table$[[$a$.$ Change in OCF,,$\%$