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

$200,000

and net operating income of

$35,000.

If sales increase by

18

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

23

percent?

Question content area bottom

Part 1

If sales increase by

18%,

the change in the firm's NOI will be

a decrease

an increase

of

enter your response here%.

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