None A proposed project has fixed costs of $94,000 per year. The operating cash flow at 6,400 unitsis $88,800.a. Ignoring the effect of taxes, what is the degree of operating leverage? (Do not roundintermediate calculations. Round your answer to 4 decimal places, e.g., 32.1616.)b. If units sold rise from 6,400 to 6,900, what will be the new operating cash flow? (Do not roundintermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.)c. What is the new degree of operating leverage? (Do not round intermediate calculations. Roundyour answer to 4 decimal places, e.g., 32.1616.)

Now calculate that:DOL=1+1.0595=2.0595So, the degree of operating leverage (DOL) is 2.0595 (rounded…

Answered: A proposed project has fixed costs of…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 4EA: Assume a company is going to make an investment of $450,000 in a machine and the following are the...

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