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It is December 31. Last year, Aberdeen Petroleum Refiners year's sales will be $7,120,000. Its fixed costs have been variable cost ratio is 12.50%. Aberdeen's

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It is December 31. Last year, Aberdeen Petroleum Refiners year's sales will be $7,120,000. Its fixed costs have been variable cost ratio is 12.50%. Aberdeen's capital interest rate of 9%, and 250,000 shares of common 40%. Corp. had sales of $8,000,000, and it forecasts that next and are expected to continue to be $4,400,000, and its structure consists of a $13.5 million bank loan, on which it pays an equity. The company's profits are taxed at a marginal rate of Given this data, complete the following sentences: The percentage change in the company's sales is . The percentage change in Aberdeen's EBIT is . The degree of operating leverage (DOL) at $7,120,000 is There are several ways to use and interpret a firm's DOL value. Consider the following statement and indicate whether it accurately reflects the meaning or an appropriate use of a firm's DOL value. is 2.5. This means that a 1% change in the firm's sales will result in Assume that at a given sales level, a firm's DOL a corresponding 2.5% change in the firm's EBIT. True or False: This statement accurately describes a firm's DOL. 0 O True O False

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