The following table represents forecasted sales information for Torres Inc.

Information	Forecasted Operations	Sales with 60.00% Increase	Unit Change
(in millions)	(in millions)	(in millions)
Sales in units	200.00	320.00	120.00
Sales revenues	$3,000.00	$4,800.00	$1,800.00
Variable cost of goods sold	(2,000.00)	(3,200.00)	(1,200.00)
Gross profit	$1,000.00	$1,600.00	$600.00
Fixed operating costs	(170.00)	(170.00)	(0.00)
Net operating income	$830.00	$1,430.00	$600.00

By how much will net operating income increase for the given increase in sales and associated expenses?

• 65%
• 79%
• 72%
• 86%

Using the percent change in net operating income computed in the previous section, calculate the degree of operating leverage for the projected change of 60.00% from the original forecast.

• 0.96X
• 1.08X
• 0.84X
• 1.20X

Assuming an identical cost structure, compared to a company with a degree of operating leverage 0.84, how risky is Torres Inc. compared to the other company?

• More risky
• Less risky
• Equally risky