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We know the following about a company: sales revenues: $10,000, obtained from selling 1,000 pairs of shoes; variable operating costs: $5,000, depreciation: $2,000; interest expenses:
We know the following about a company: sales revenues: $10,000, obtained from selling 1,000 pairs of shoes; variable operating costs: $5,000, depreciation: $2,000; interest expenses: $1,000. a) Determine the operating breakeven point in quantity and sales revenue. b) If sales increase by 20% what is the value of the operating leverage? c) If sales increase with an additional 10%, what will be the increase in EBIT?
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