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A company has fixed operating costs of $500,000 and annual depreciation of $150,000. The expected operating income (EBIT) is $175,000. What is its Degree of Operating Leverage (DOL)? a. 4.71 b. 3.71 c. 2.86 d. 4.86

A company has fixed operating costs of $500,000 and annual depreciation of $150,000. The expected operating income (EBIT) is $175,000. What is its Degree of Operating Leverage (DOL)? a. 4.71 b. 3.71 c. 2.86 d. 4.86

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 23MC: If a firm has a contribution margin of $78M90 and a net income of $13,700 for the current month,...
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A company has fixed operating costs of $500,000 and annual depreciation of $150,000. The expected operating income (EBIT) is $175,000. What is its Degree of Operating Leverage (DOL)? a. 4.71 b. 3.71 c. 2.86 d. 4.86
Transcribed Image Text:A company has fixed operating costs of $500,000 and annual depreciation of $150,000. The expected operating income (EBIT) is $175,000. What is its Degree of Operating Leverage (DOL)? a. 4.71 b. 3.71 c. 2.86 d. 4.86
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