Question
Modern Artifacts can produce keepsakes that will be sold for $50 each. Nondepreciation fixed costs are $700 per year, and var costs are $40 per
Modern Artifacts can produce keepsakes that will be sold for $50 each. Nondepreciation fixed costs are $700 per year, and var costs are $40 per unit. The initial investment of $2,100 will be depreciated straight-line over its useful life of 3 years to a final val zero, and the discount rate is 16%. a. What is the degree of operating leverage of Modern Artifacts when sales are $7,750 ? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Degree of operating leverage is : b. What is the degree of operating leverage when sales are $13,500 ? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Degree of operating leverage is:
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