(Using degree of operating leverage) Last year Baker-Huggy Inc. had fixed costs of

$200,000

and net operating income of

$27,000.

If sales increase by

20

percent, by how much will the firm's NOI increase? What would happen to the firm's NOI if sales decreased by

22

percent?

If sales increase by

20%,

the change in the firm's NOI will be

of

%.

(Select from the drop-down menu and round to two decimal places.)