What is the lowest possible value for the degree of operating leverage for a profitable firm? Show

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What is the lowest possible value for the degree of operating leverage for a profitable firm? Show with a numerical example that if Modern Artifacts (see Problem 14) has zero fixed costs, then DOL = 1 and in fact sales and profits are directly proportional, so a 1% change in sales results in a 1% change in profits.

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Fundamentals of Corporate Finance

ISBN: 978-0077861629

8th edition

Authors: Richard Brealey, Stewart Myers, Alan Marcus

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