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The company is considering the purchase of a new machine. This asset will have fixed costs of $100,000 per year. The operating cash flow at
The company is considering the purchase of a new machine. This asset will have fixed costs of $100,000 per year. The operating cash flow at a production level of 10,000 units will be $400,000. The company has calculated its degree of operating leverage at 1.25. If units sold increases from 10,000 units to 15,000 units, what will the operating cash flow be at the 15,000 unit production level?
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