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Question 6 [5] Solar power generation entrepreneurs consider the current power challenges in South Africa as business opportunity. The unbundling of the power utility plant

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Question 6 [5] Solar power generation entrepreneurs consider the current power challenges in South Africa as business opportunity. The unbundling of the power utility plant further strengthens their business case. The signing of Independent Power Producers (IPPs) operationalises the renewable energy generation in South Africa. The small businesses two years down the line produce summary of sales revenues, bad debts and EBIT: Period Sales Bad debts profit Operating (EBIT) Year 1 R15 000 000 R14 000 000 R9 000 000 Year 2 R25 000 000 R15 000 000 R18 000 000 Required: Calculate the degree of operating leverage for this business venture

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