Question
Operating Leverage - A project has fixed costs of $1000 per year, deprecation of $500 a year, annual revenue of $6000 and variable costs equal
Operating Leverage - A project has fixed costs of $1000 per year, deprecation of $500 a year, annual revenue of $6000 and variable costs equal to two thirds of revenues (LO10-3)
A) If sales increase by 10% what will be the increase in pretax profits?
B) What is the degree of operating leverage of this project?
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Analysis for Financial Management
Authors: Robert c. Higgins
8th edition
73041807, 73041803, 978-0073041803
