The magnitude of operating leverage for Forbes Corporation is 2.7 when sales are $190,000 and net income is $23,000. If sales increase by 5%, what is net income expected to be?

a. $26,105

b. $27,000

c. $24,150

d. $23,150

2.

For the last two years BRC Company had net income as follows:

	2012	2013
Net income	$90,000	$110,000

What was the percentage change in income from 2012 to 2013? (Round your answer to 2 decimal places.)

a. 18.18% increase

b. 22.22% decrease

c. 22.22% increase

.d 18.18% decrease