Question
Marty Byrde's Laundry Service is analyzing the addition of some new dryers to their collection of laundry facilities in Lake Ozark. Management has compiled the
Marty Byrde's Laundry Service is analyzing the addition of some new dryers to their collection of laundry facilities in Lake Ozark. Management has compiled the following information to determine whether or not they should be purchased. The dryers project has an initial fixed asset requirement of $1.3 million across all of their stores, which would be depreciated straight-line to zero over the 12-year life of the project. Projected fixed costs are $710,931 and the anticipated annual operating cash flow is $202,437. What is the degree of operating leverage for this project?
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